The good news is, participant trust in their plan provider is at all-time high. The bad news? Well, it has something to do with that level of trust. And it looks even worse for financial advisors.
According to the 2019 Participant Trust and Engagement Study by National Association of Retirement Plan Participants (NARPP), for the second year in a row, participants’ level of trust in their plan provider is holding steady at 30%, an all-time high for this study, the NARPP said in a press release.
The survey claims that the level of trust in financial advisors is just 16% (though that is a general statement, and not how they feel about their specific advisor).
Despite what the authors described as this “relatively high” level of trust in one’s own provider, the data show a significant downward trend in overall satisfaction with providers, from 41% as recently as 2014 to 31% today.
And if that doesn’t seem like a particularly good reading, participants’ level of trust in their employer is even lower, and trending downward – from 27% in 2017 to 25% in 2019.
Short ‘Fails’
Only 43% are satisfied with the education services they get from their provider, and participant engagement is decreasing across all channels of website usage, tools, etc. And while it may not be related, participants are feeling less confident in their ability to make good financial decisions – (just) 18% feel comfortable planning for retirement, although 42% feel knowledgeable about finances. At the same time, financial stress is high at 49% – and yes, Millennials (60%) are feeling the most stress.
On that subject:
- Roughly half of Millennials have student debt (median amount is $27,000)
- About a third (32%) of Millennials have given financial support to a parent over the past year
- On the other hand, 33% of Boomers have given financial support to an adult child over the past year
Fee transparency is said to be a key driver of trust – though 55% of participants don’t know how much they are paying in fees.
As for the other 45%...
NARPP describes itself as a San Francisco-based 501(c)(3) nonprofit organization dedicated to improving retirement savings outcomes for all working Americans. The survey was based on a random national sample of more than 4,500 retirement plan participants.
