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Fewer Plans Offering Investment Advice

The percentage of plans offering investment advice slipped lower over the past year, with most of that decline coming at the expense of advisors.

PLANSPONSOR’s 2014 Defined Contribution Survey reported that 70.4% of plans responding offer some kind of investment advice to their DC plan participants, down from 75.3% a year ago.

While the respondent base is different — the 2014 Survey included responses from 5,291 plan sponsors, the 2013 survey 5,342 — the relative proportions of advice offerings were remarkably consistent year-over-year.

In 2013, 37.5% offered investment advice via an advisor outside the plan, though that had slipped to 34.5% in this year’s survey. Advisors were the advice channel of choice for:

  • 41.6% of plans with less than $5 million in assets (approximately 48% in the 2013 survey)
  • 39.7% of plans with $5 million to $50 million in assets
  • 26.1% of plans with $50 million to $200 million in assets (23.8% in the 2013 survey)
  • 17.1% of plans with $200 million to $1 billion in assets (approximately 17% in the 2013 survey)
  • 9.1% of plans with more than $1 billion in assets (versus nearly 17% in the 2013 survey)

At 34.5%, advisors remained the top cited source for investment advice by survey respondents. Other advice channels identified in the 2014 PLANSPONSOR survey:

  • proprietary from DC provider: 29.6%
  • a third party independent of the record keeper (Financial Engines, Morningstar, etc.): 19.3%
  • through another source: 4.2%

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