For many US investors, participating in an employer-sponsored defined contribution plan is the beginning of a lifelong pursuit of asset building for a comfortable retirement. In fact, there are nearly $8 billion in retirement assets held in defined contribution plans in the United States.
But many DC plan participants also have assets to invest outside of their contributions to the DC plan. Some of those investors choose to use the provider or advisor who maintains their DC plan to invest funds in other products, while some plan participants go outside their plan to find an advisor to work with.
Spectrem Group’s Advisor Usage Among DC Plan Participants report reveals the likelihood of plan participants using the advisors they know from their plan administration or going outside the plan to find a suitable advisor. It examines the satisfaction each type of participant has toward their advisor, the services they expect to receive from their advisor, and how the amount of money in their DC plan impacts their relationship with their advisor.
For example, just four out of ten (38 percent) plan participants utilize their plan provider to manage outside assets, but an additional 35 percent of participants would consider doing so, representing a sizeable untapped market for providers.
One barrier for providers is that 63 percent of participants who do not use the same company for retirement plan and other assets believe their financial advisors are more concerned with selling products than advising.
Plan providers should emphasize the level of satisfaction among participants who entrust outside assets to their provider. Fully 93 percent of these participants report being satisfied vs. just 31 percent of participants who use a third party to manage assets.
For additional information or to schedule an interview with George H. Walper, Jr., President of Spectrem Group, contact David Pickard at firstname.lastname@example.org, 708-434-5006.
The Advisor Usage Among DC Plan Participants report is based on a survey of 831 401(K), 403(b), and 457 defined contribution plan participants who have a household net worth of at least $100,000. Weighting is done to reflect the Defined Contribution market within the United States. The survey was conducted using an online panel in 2017.
About Spectrem Group: Spectrem Group (www.spectrem.com) strategically analyzes its ongoing primary research with investors to assist financial providers and advisors in understanding the Voice of the Investor.
© 2018 Spectrem Group