Think Advisor’s Michael S. Fischer recently published Plan Sponsors Want More Guidance From Advisors: Fidelity, summarizing the findings of Fidelity survey conducted in March 2021.

Fischer’s title does give away the overall point, but stick with me, the obvious sometimes reveals more.

Fidelity wanted to know what plan sponsors expected from their advisors during the pandemic.  At the highest level, Fidelity found that sponsors wanted expertise and consultation from advisors that would directly enable them to help their employees plan for retirement.  Liz Pathe, head of defined contribution investment only sales at Fidelity Institutional noted,

Plan sponsors are seeking expertise from their plan advisors not only to help guide and inform their investment menu and plan design, but also to help employees strengthen their financial well – being.”

Pathe went on to say,

“Plan advisors should take an active role in engaging both plan sponsors and their employees to emphasize the value of their plan and educate them to help improve outcomes.”

Fidelity found that sponsors’ goals for their plans are employee-focused counting on their advisor to deliver expertise in minimizing plan costs, delivering a high-quality investment menu and consulting on regulatory changes.  All three of these, while administrative in nature, benefit the employees saving in the plan.  After all, savings in plan costs equal additional growth in a participant’s account.

The three noted top drivers of advisor value were:

  • “Helps improve employee outcomes.”
  • “Helps improve employee satisfaction.”
  • “Provides financial advice and guidance to participants.” (Often provided in group settings, online in collaboration with the recordkeeper and other creative ways)

These three drivers are deeply intertwined.

It would stand to reason that a participant who has received and acted upon an advisor’s advice and guidance should feel more confident and thus more satisfied with the advisor and the plan benefit compared to going it alone.  And that would also possibly translate to a more overall contented employee. Additionally, assuming the advisor helped the participant increase her savings rate or better understand an appropriate risk level to take, that participant’s outcome should improve. And when a participant’s outcome improves and the plan sponsor is satisfied with the guidance provided by the advisor, that’s an arrangement that will make everyone happy.

Is your advisor delivering this type of service?

For disclosures, please click here.