PLANADVISER - Spring 2023 - 22

2023 PLANADVISER Adviser Value Survey
tant to many, who were managing through both inflation
and market volatility-and the vast majority of plans
overall allow participants to borrow against their account.
Of note is the work some advisers are doing to reduce
the leakage often associated with loans. More plans with
advisers (32%) either allow, or say they will soon allow, for
separated employees to continue paying off any loans after
termination, instead of needing to do so immediately. That
compares with 23% of plans lacking an adviser.
Having an adviser also correlates with participants
having more possible options for in-plan distributions.
Hardship withdrawals were relatively uniform across
plans with or without advisers. But when it came to letting
an employee access assets he had previously rolled into
the plan, 38% of plans with an adviser allowed for such
distributions vs. 28% without an adviser.
Work to Be Done
In a sign that the 401(k) industry has advanced from its early
days, advisers no longer seem to make a difference when
it comes to many of the basics. Consider these snapshots:
Employee participation is essentially flat at plans without an
adviser (81%) as compared with plans that have an adviser
(80%), and the average participant account balance is higher
for plans without an adviser ($147,646) than at plans with an
adviser ($143,095).
These statistics show, on one hand, that plans can get
people saving even if no adviser stands behind them. With
new government legislation incentivizing businesses to
offer retirement plans, effective in 2024, along with current
and future state mandates that businesses do so, participation
is apt to increase even more in coming years, says
Kaczynski. That positive movement, however, still raises
the question of: How can advisers help participants reach
better savings outcomes? he says.
" The conversation we're often having is, 'OK, we have
essentially solved how to get more folks to participate,' "
Kaczynski says. " But how do we get more people to engage
with their savings and outcomes? That's really the million
dollar question. " -Alex Ortolani
Investment Menu Options (continued)
Investment vehicles currently used in the plan
Collective investment trust
Without adviser
Mutual funds
Without adviser
92.7%
With 3(38) fiduciary adviser 89.2%
With 3(21) fiduciary adviser 96.1%
With nonfiduciary adviser 92.6%
With adviser - unsure of type 89.9%
Separate accounts
Without adviser
15.9%
With 3(38) fiduciary adviser 23.1%
With 3(21) fiduciary adviser 27.9%
With nonfiduciary adviser
3.7%
With adviser - unsure of type 16.5%
18.3%
With 3(38) fiduciary adviser 16.9%
With 3(21) fiduciary adviser 24.8%
With nonfiduciary adviser 22.2%
With adviser - unsure of type 21.5%
Self-directed brokerage window
Without adviser
24.4%
With 3(38) fiduciary adviser 21.5%
With 3(21) fiduciary adviser 30.2%
With nonfiduciary adviser
25.9%
With adviser - unsure of type 20.3%
22 planadviser.com | Spring 2023 | Participants
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PLANADVISER - Spring 2023

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