Financial Advisors Are Well-Positioned To Improve Retirement Readiness

Plan sponsors and financial advisors are increasingly focused on taking the steps necessary to help retirement plan participants have good retirement outcomes. Research finds participants are not confident about their retirement planning abilities or the decisions they have made with regard to their retirement plan. About 75 percent are not very confident they are contributing the right amount, selected the right investments, or have the right asset allocation. And most are not very confident they will be financially ready when it’s time to retire. *

Financial advisors can play a big role in helping plan sponsors make plan decisions that can positively impact participant retirement outcomes. These services not only demonstrate your value, but can also greatly influence participant results:

• Annual Plan Reviews – A regular plan wellness check can help identify areas of weakness that can be improved through plan design or education.
• Plan design consulting – Considering employee needs and making best-use of plan features can influence savings decisions. Automatic features, plan match and loan structure, and investment menu design can all be used to help employees with their retirement planning.
• Investment menu design – A streamlined investment menu that is built to meet the unique needs of the plan’s participants can help simplify the process of investing and allocating plan assets, and reduce costs.
• Provider and investment fee analysis and benchmarking – Over the long-term, plan and investment fees can add up and impact participant account balances. Regularly benchmarking and reviewing these costs can help ensure plan services and investments charge reasonable fees and are a good value.

Engaging participants in their retirement planning is also vitally important to their success. Financial advisors can help them stay engaged by regularly communicating about the plan and helping them make decisions about their accounts. Working with participants in a group or on an individual basis can help improve their confidence in their retirement planning decisions:

• Periodic group enrollment meetings – Meeting with employees can help them better understand their retirement plan benefit, motivate them to save, and provide them with steps they can take to plan for the future.

• One on one retirement planning – These individual planning sessions offer financial advisors with the opportunity build relationships with participants and provide a personal, holistic retirement strategy and action plan they can put in place to get retirement ready.

Workers are relying on their workplace retirement plan as a main source of retirement income, so it’s critically important that their plan helps them succeed at getting retirement ready.

Financial advisors can work with plan sponsors to design best in class retirement plans and keep participants engaged and on track for good retirement outcomes.

*SOURCE: Voice of the Defined Contribution Participant Study. BrightWork Partners, 2016.