An Adviser's Value

Plan sponsors that work with a dedicated financial adviser for their workplace retirement plan see these professionals as partners in improving outcomes, according to a recent study, “The Value of a Financial Advisor,” from Morgan Stanley at Work. The vast majority of the 350 survey respondents said the adviser delivers better outcomes (87%), encourages participation (86%), provides support for answering employee questions (92%) and is worth the cost (95%).

The survey’s results also suggest that plan sponsors value peace of mind, with 28% saying oversight on investment management was the main reason they have an adviser serve their 401(k) plan. Because sponsors report that compliance and fiduciary guidelines are critical concerns—75% and 67%, respectively—it makes sense they would welcome the oversight, the study report observes.

For plans that currently use a dedicated financial adviser, 85% reported that most of their eligible employees are on track for retirement, while plans without such an adviser noted a lack of insight into retirement readiness. When it comes to employee participation, 44% of sponsors that provide a dedicated financial adviser said 75% to 100% of eligible employees participate in their 401(k) plan.

These outcomes coincide with data from the 2021 PLANSPONSOR Defined Contribution Plan Benchmarking Survey indicating that 53.7% of plan sponsor respondents have worked with the same adviser for more than seven years—suggesting a high level of satisfaction with the service.

The Morgan Stanley survey found that businesses of different sizes prioritized different needs. Businesses with over 3,000 employees cited needing investment oversight (37%), and midsize businesses with 20 to 100 employees emphasized the need for guidance on plan design (20%).