Plan Sponsors Increasing Use of Financial Advisers: MFS Investments Survey

Are you a plan sponsor looking to provide more value to your participants? According to a recent survey by MFS Investments, more plan sponsors are pointing participants to financial advisers to help them navigate their retirement planning journey. In fact, 64% of plan sponsors are currently offering advisory services to participants, with an additional 17% considering adding this option.

The demand for financial advice is not only coming from plan sponsors but also from participants themselves. A separate survey of 4,000 participants showed that 70% would use an advisory service if offered, with 20% possibly using it. This highlights the growing need for personalized and customized financial advice as individuals approach retirement.

For large plan sponsors, managed account services are a popular choice, with 56% of plans over $1 billion offering advice through managed accounts. Mid-sized and small plans tend to provide more general adviser offerings. However, only a small percentage of sponsors currently offer services specifically tailored to retirement, indicating a potential area for growth in the future.

Communication is key when it comes to connecting participants with advisory services. Many participants desire personalized advice and guidance, especially during times of market volatility or life changes. Additionally, there is a growing interest in phased retirements, with nearly half of employers considering programs that allow workers to gradually transition into retirement.

Plan sponsors are also focusing on areas such as fixed income and inflation protection options, with a greater emphasis on these than equity options. When asked about their top concerns, plan sponsors cited changing regulatory and legislative landscapes, litigation risk, plan administration burdens, retirement income solutions, and participation and savings rates.

Overall, the shift towards providing financial advice to participants reflects a growing recognition of the need for personalized guidance in retirement planning. By offering advisory services and focusing on key areas of concern, plan sponsors can help participants achieve better outcomes and navigate the complexities of retirement planning.