Chicago-based institutional retirement and investment consulting firm Blue Prairie Group added Jere Cowden and Mark Muto to its network of retirement specialist consultants.
Blue Prairie Group (BPG)
says the pair will lead the Pittsburgh office as part of its adviser
affiliate program.
Prior to joining Blue Prairie, Cowden and Muto were principals
of Cowden Financial Services, an Employee Retirement Income Security Act-focused
registered investment adviser. As part of the partnership, Cowden Financial
Services will adopt the Blue Prairie Group brand and will have access to Blue
Prairie’s in house research team, systematic marketing efforts, and proprietary
tools and reports, including the firm’s stable value database and the BPG Plan
Health Report.
“The partnership with Blue Prairie Group allows us to
leverage the scale and efficiencies of a larger, nationally recognized firm,
while delivering personalized local consulting services to our clients,” Cowden
explains. “We are also very confident this partnership will help to propel our
growth in the coming years.”
Muto says the team will continue to advise on a variety of
plan types and complicated client situations related to retirement benefits. “BPG
brings a great deal of depth and expertise to the table that truly separates
them from the other firms we considered,” he adds.
Asked whether they prefer a “a 401(k)-type plan that you
control and invest in, and which the company may contribute to, with the payout
dependent on your plan’s performance” or “a company pension plan that provides
you with a guaranteed income in retirement, with the payout dependent on your
salary and how long you worked for your employer,” 52% of not-yet-retired
investors chose the 401(k), versus 46% who chose the pension.
According to the Wells Fargo/Gallup Investor and Retirement
Optimism Index for the fourth quarter, 69% of working investors have access to
an employer-sponsored 401(k) plan, and 96% of those with access are actively
contributing to their plans. Eighty-six percent say their employer matches some
part of their contributions, and 81% say this is “very important” in helping
them save for retirement.
While three-quarters would be in favor of a new employer
automatically enrolling them in a 401(k) plan at the start of their employment,
and 66% would want their employer setting up automatic increases for their
contributions, fewer than half would favor their employer automatically
rebalancing their investments each year (44%) or automatically making
age-appropriate investment choices for them (41%).
Most employed investors with a 401(k) plan rely on advice
for using the plan effectively, but they are commonly finding it from outside
sources. About one in four (27%) say they rely on a professional adviser
outside of work, and another 39% rely mainly on themselves or a friend or
family member for help. Just 22% say most of their advice comes from the financial
firm that runs their 401(k) plan, and 11% say they seek advice from their
company’s benefits department or another financial professional where they
work.
“People seek advice about their 401(k), and the industry
needs to make it easier for participants to access advice. Investors rely on
these plans and want to talk to people who can help them understand a proper
savings rate, investment diversification, and concepts like longevity risk and
income management. We have to be much more proactive as an industry in helping
them make the right choices for their future,” says Joe Ready, director of
Wells Fargo Institutional Retirement and Trust.
Employed investors say that after health care benefits, a
retirement savings plan such as a 401(k) is the most important benefit their
employer provides (61%), exceeding paid time off or sick leave (23%), life
insurance (5%) and stock options (4%).
About
one-third (32%) of investors says they have increased their savings for
retirement in the last 12 months, while about two-thirds have not. At the same
time, 9% of working investors—including 14% of those ages 18 to 39—are not
saving for retirement.
While about one-quarter of working investors say they
could not possibly save any more each month, 69% believe they could save more.
Among this group, the median additional amount they estimate they could save
each month is $250, with 31% estimating they could save an additional $400 or
more each month.
Among those who are working and saving, the average age they
started saving is 29. Four in 10 (45%) started saving at age 30 or older. A
majority (80%) of investors say Americans’ inadequate retirement savings comes
down to “delaying” the process of saving for retirement and having a hard time
paying the day-to-day bills.
In addition, many investors are clearly counting on Social
Security to supplement their personal savings and investments in retirement.
When asked if they would be motivated to save more if they knew they would not
receive Social Security money when they retire, more than half (54%) say they
would be motivated to save either “a lot more” or “a little more.” Just 44% say
that scenario would not make a difference in how much they save.
A lack of savings cannot necessarily be pinned on people
taking out loans or withdrawals from their 401(k) plans. Relatively few workers
who participate in their employer’s 401(k) report that in the past five years
they have taken out a 401(k) loan (16%). Even fewer, 9%, have taken an early
withdrawal from the plan. However, 21% of investors with a 401(k) have done at
least one of these things, including 5% who have done both.
More than three-quarters of those polled (78%) currently own
stocks, versus 22% who do not. A little more than half (56%) of investors say
that “now is a good time to invest” in the financial markets, up from 52% at
the start of 2014. As recently as November 2012, the majority of investors said
it was not a good time to invest. Notably, all of this quarter’s heightened
confidence in the markets comes from retirees, 54% of whom say it’s a good time
to invest in the markets, up from 44% last quarter. Working investors’ views
virtually didn’t change, with 56% in the fourth quarter saying it is a good
time to invest.
In a separate question, a minority (45%) of investors rate
the financial markets as an “excellent” or “good” way for average Americans to
grow their assets, although this is an increase from 37% a year ago. A majority
(55%) still rate the markets as “only fair” (38%) or “poor” (17%) for the
average American.
The
Wells Fargo-Gallup Investor and Retirement Optimism Index is based on a survey
conducted November 14 through 23 by telephone, among 1,009 investors randomly
selected from across the country. For this study, the American investor is
defined as an adult in a household with total savings and investments of
$10,000 or more. About two in five American households have at least $10,000 in
savings and investments. The sample size is comprised of 71% working and 29%
retired investors. Of total respondents, 60% had reported annual income of less
than $90,000 and 40% of $90,000 or more.