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Fiduciary Concerns Top Advisor Hiring Criteria

A new survey finds that, for the first time ever, fiduciary responsibility is the top reason plan sponsors start using retirement advisors.

And while that turns out to be less than a majority, the 38% of plan sponsors surveyed that said they were concerned about their fiduciary duty – a significant increase from the 24% last year. More than two-third (69%) – a new high – ranked an advisor’s willingness to take on a formal fiduciary role as important.

Record Levels of Satisfaction, But…

The research also found that a record 72% of plan sponsors in the study are satisfied with their advisors, with two-thirds saying they get good value from them. Despite this, the percentage of respondents actively looking to change their advisors also reached a new high of 23%, with the most common reason being the need for a more knowledgeable advisor who is an expert in a variety of areas, including how to best manage fiduciary responsibilities.

The survey also found that plan sponsors are looking for retirement advisors who can consult on plan design and improving plan performance, with an all-time high of 86% having made plan design changes in the last two years, and a similar 87% having made investment menu changes in the last two years.

Reinforcing the rationale behind a growing interest in retirement outcomes and financial wellness, an all-time high of 88% of the plan sponsors surveyed said they have participants who delay retirement due to a lack of savings.

Advisor Skills Sought

According to the survey authors, plan sponsors who took part in the study are looking for three skills in their advisors:



    • Providing guidance on plan design changes. Plan sponsors are focused on driving participation among their employees, with a record number of respondents (61%) citing this as a reason for design changes. More than three-quarters (76%) of plan sponsors surveyed claim to be planning future design changes – the highest percentage ever. While retirement advisors and consultants are considered the primary driver of plan design changes, recordkeeper influence is expanding, with more plan sponsors saying that advisors and recordkeepers have equal impact on decisions, according to the report.

    • Providing guidance on investment menu changes. Plan sponsors are just as active with menu changes as they are with plan design changes, with 87% of respondents having made an investment menu change in the past two years – an increase of 52% since Fidelity began asking this question in 2012. Again, plan sponsors in the survey rely most heavily on advisors for investment menu selection. As for how those plan sponsors are measuring investment performance, the survey found that it was:



54% - relative to benchmark
53% - relative to investment category
42% - alignment with investment strategy
40% - alignment with stated plan risk parameters




      • Helping set clear savings and retirement income goals. While the survey found a record number of the plan sponsors canvassed are concerned about their participants’ lack of savings, more than two-thirds (68%) don’t define clear savings or retirement income goals.




The 2016 Plan Sponsor Attitudes Survey was conducted in collaboration with E-rewards, an independent market research company, via an online survey of 976 plan sponsors on behalf of Fidelity in February 2016. Respondents were identified as the primary person responsible for managing their organization’s 401(k) plan (ranging in size between 25 and 10,000 participants), and the survey focused on those plan sponsors (849, or approximately 87%) using the services of a financial advisor or plan consultant. Previous Fidelity surveys were conducted in 2008, 2010, 2012, 2013, 2014 and 2015.

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