PLANADVISER - September/October 2022 - 4

data points //
A Helping Hand
Participants may need prompting to use available adviser services
O
nly 47% of survey respondents
in Schwab's " 2022 401(k) Participant
Study " are very likely to
achieve their savings goals. This is 6%
less than was found by Schwab's 2021
survey. Almost half indicated they need
help with essentials such as how best
to invest their 401(k) and how to determine
the amount to save for retirement.
This reveals why dispelling misunderstandings
about employer advice,
at companies that offer it, is key. The
Value of a Financial Advisor, a survey
from Morgan Stanley at Work, found
that, of sponsors currently using a dedicated
financial adviser, 85% said most
of their eligible employees are on track
for retirement, while plans without
such advice noted a lack of insight into
retirement readiness.
Of sponsors who responded to the
2021 PLANSPONSOR Defined Contribution
Survey, 51% offer meetings with
an adviser outside of the plan; 27%
use a third party independent of their
recordkeeper; and 41% use proprietary
services offered through their provider's
website or call center. Approximately
16% do not provide this benefit.
Employers that do offer advice
products and services know, however,
that these are not always utilized to
the fullest. The question is sometimes
" Why? " when there is such demand,
according to surveys.
About one-quarter of the respondents
in Schwab's study have specific
reasons for not seeking advice through
their employer.
For instance, 23% of all respondents
said it is too expensive, and 22% said
advice offered would be limited to products
available through benefits at work.
While that may be true, it also might
not be. Perhaps it is worth ensuring
that communications are clear-specifically
the cost of such options, what is
included and what is extra, as well as
the support that can be had with the
advisory firm to which participants
have access. -Judy Faust Hartnett
Methods Sponsors Offer for Advising Plan Participants
1-on-1 meetings with an adviser outside the plan
A service via our provider's website/call center/etc.
A 3rd party independent of our recordkeeper
51%
41%
27%
Source: PLANSPONSOR DC Survey
Where Participants Need Help
Knowing specifically how to invest a 401(k)
Calculating how much to save for retirement
Figuring out how to create a retirement income stream
Determining at what age I can afford to retire
Anticipating tax expenses in retirement
Gauging what expenses will be in retirement
Keeping expenses down to save more for retirement
Figuring out how to catch up on retirement saving
Managing debt
Why Not Seek Advice at Your Job?
Have a financial adviser
It's too expensive
It would apply only to products through my work benefits
Don't think my employer offers financial advice as a benefit
Don't want my employer to know about my finances
Have too little money to talk to an adviser
Don't have time
43%
42%
38%
36%
32%
31%
30%
28%
26%
25%
23%
22%
19%
18%
15%
11%
Source: Schwab Retirement Plan Services, Inc., " 2022 401(k) Participant Study "
Note: Survey respondents were 1,000 401(k) plan participants, ages 21 through 70,
who work for a company that has 25-plus employees and a 401(k) plan.
4 | planadviser.com September-October 2022
http://www.planadviser.com
PLANADVISER - September/October 2022

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