Only 25% of plan sponsors with 100 or more employees and plan assets between $5 million and $500 million partner with a professional adviser, according to a recent report from The Retirement Advisor Council.
The study demonstrates benefits of partnering with a professional retirement plan adviser for 401(k) and 403(b) plan sponsors.
The survey of 409 employers offering a 401(k) or a 403(b) plan found that sponsors who partner with an adviser enjoy:
- Superior retirement outcomes for their plan participants
- An understanding of fiduciary issues
- Improved plan designs
- Improved overall asset allocation among plan participants
- A greater confidence in plan compliance and investment options
- More reasonable fees
It is no surprise that a majority of plan sponsors who partner with a professional adviser say their partnership is a rewarding necessity. Plan sponsors who use the services of a professional generally receive glowing client reviews. For instance, among plan sponsors who rely on a professional to aid Investment Policy Statement formulation, more than 70% say their adviser does an outstanding job.
The report identifies 10 adviser services received by more than two-thirds of clients including periodic review of investment options, examination of plan compliance with applicable laws, states policies and regulations.
"As financial planners, client satisfaction is always our first and foremost concern,” says Jim O'Shaughnessy, an adviser and council board member of Sheridan Road Financial. “Positive client feedback is something we value highly, and for which we continually strive.”
Respondents say the choice of an adviser is often a deliberate decision on the part of plan sponsors; it is rarely the outcome of a cold call.
The survey was conducted online between Sept. 6, 2011 and Sept. 27, 2011 with funding and research oversight by John Hancock Funds, MFS Investment Management, MassMutual Retirement Services, Diversified, and Franklin Templeton Investments.
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