Most Plan Sponsors Offer Advice

Offering participant advice has become the norm for the majority of retirement plan sponsors, the 2015 PLANSPONSOR Defined Contribution (DC) Survey found. Nearly three-quarters (74%) of sponsors supply some form of advice.

However, smaller plans are more likely to rely on the personal touch of an adviser in one-on-one meetings, whereas mid-size, large and mega plans more commonly rely on their defined contribution provider or a third party to deliver the advice to participants.

On-site meetings with a financial adviser outside of the retirement plan are offered by 45.1% of micro and 48.6% of small plans. That provision drops to 32.0% for mid-size, 24.9% for large and 12.2% for mega plans. The survey defines micro plans as those having less than $5 million in assets, small plans as having $5 million  through $50 million, mid-size plans as having more than $50 million through $200 million, large plans as having more than $200 million through $1 billion, and mega plans as having more than $1 billion in assets.

Those larger plans tend to rely on proprietary tools and services available via their defined contribution provider’s website or call center: 44.4% of mid-size, 49.4% of large and 33.7% of mega plans turn to their DC provider to supply advice, compared with 34.2% of small and 20.7% of micro plans.

Third-party advice independent of the recordkeeper, offered by companies such as Financial Engines or Morningstar, is another alternative gravitated to by larger plans, especially mega plans: 19.0% of mid-size, 21.5% of large and 38.4% of mega plans rely on a third party, whereas only 14.8% of small and 11.0% of micro plans do so.