Plan Sponsors Increasingly Concerned with Employee Retirement Outcomes

Retirement plan sponsors will always be concerned with financials, but a new survey shows their top concern is now ensuring that their employees are prepared for retirement.

So says the fifth annual Plan Sponsor Attitudes survey by Fidelity Investments. This marks the first time employee retirement outcomes has topped the list, and shows plan sponsors now want more from their advisors than help navigating financial charts.

“While fiduciary responsibilities will always be top of mind, (plan sponsors’) needs are becoming more complex as all parties recognize the difficulties their employees are facing in saving for retirement,” said Jordan Burgess, senior vice president and head of defined contribution investment only (DCIO) sales at Fidelity Financial Advisor Solutions.

The survey included sponsors with plans ranging in size from 25-10,000 participants. It’s designed to help advisors understand what their clients want and how advisors can recruit — and keep – clients.

“This may require some advisors to shift their mindset,” Burgess said. “In addition to knowing their fees, funds, and fiduciary responsibilities, they have to make sure they’re focused on retirement outcomes for employees.”

In general, Fidelity found most plan sponsors are satisfied with their advisors. Those that switched cited the need for an advisor with more retirement plan expertise as their top concern. On average, Fidelity found plan sponsors are approached 5 times per year by advisors seeking their business.

Fidelity compiled 3 key takeaways for advisors based on its findings.

First, the company said advisors need to devise ways to help plan sponsors set retirement-preparedness goals and assess their progress toward those goals. That means recommending techniques — such as auto-enrollment – which sponsors can use to reach their goals.

Second, advisors should be prepared to offer robust, holistic services and find opportunities to show their expertise and wide investment knowledge. Fidelity found two-thirds of plan sponsors make changes to their investment menus in their past 2 years.

Finally, Fidelity said advisors need to do a better job of being in regular contact with their clients. Fewer than 1 in 5 plan sponsors said they receive consistent communication from their advisors on the performance of their plans. Those who did, however, were universally satisfied with their advisors, Fidelity found.