Advisors may need to step up their game if they want to attract or hold onto their 401(k) plan sponsor clients, according to news reports.
Around 34% of plan sponsors want to change advisors and are in search of those that communicate better with plan participants and offer them education about saving and investing for retirement, Fidelity says, according to FA-IQ sister publication Ignites. Only 16% of plan sponsors indicated last year that they were looking to switch advisors, according to the publication.
Plan sponsors also want advisors with lower fees, more retirement expertise and better investment options, Ignites writes, citing the study, which surveyed 1,169 plan sponsors with at least $3 million in plan assets and at least 25 participants.
Advisors will need to do more if they want to work with plan sponsors.
The increased threat of lawsuits brought by plan participants has made plan sponsors focus on their fiduciary duties, which suggests that they’ll be scrutinizing what they pay advisors for, said Lou Harvey, president and CEO of Dalbar, according to Ignites.
Fidelity says close to 50% of plan sponsors surveyed want their advisors to be better at helping them contain costs while 44% said they want help from advisors selecting and supervising investments for the plans, the publication writes.
Advisors can take simple steps to get on better terms with plan sponsors, such as by focusing on their employees’ ability to save enough for retirement, said Liz Pathe, Fidelity Institutional’s head of defined contribution investment only sales, according to Ignites. And many plan sponsors would welcome it if advisors discussed additional options such as financial wellness programs and health savings accounts, according to the study cited by the publication.
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