Value Proposition

In this issue’s Adviser Value Survey, we show the value of plan advisers by comparing plans that use them with plans that do not. However, when we recently conducted the first Participant Survey for PLANADVISER’s sister publication PLANSPONSOR, we were surprised to see such dramatic differences between the savings rates of participants when a financial adviser is involved with the plan versus when one is not. Some of the most telling evidence that advisers add value to participants includes the following:

• 401(k) plan participants who use advisers are more likely at every age to have saved at least $100,000 for retirement;
• Even among those with less than $75,000 in household income, plan participants using advisers are almost three times as likely to have saved at least $100,000 for retirement; and
• Plan participants are significantly more likely to be confident in their ability to achieve retirement goals when they consult an adviser. Almost as important: The number of people with “unknown” confidence drops by almost 60% when an adviser is used.

Participants who utilize the services of financial advisers—either through their employers or on their own—start saving more money at earlier ages and save at higher rates continuously throughout their lives. Conversely, participants who do not use advisers save less at younger ages and then race to catch up as they get older. They generally have less retirement savings throughout their lives and less confidence in reaching their retirement goals.

Graphs with additional data can be found on the next page.