Benefits

Wells Fargo Sees Increase in Participant Loans

By PLANSPONSOR staff editors@plansponsor.com | August 24, 2012

August 24, 2012 (PLANSPONSOR.com) - Wells Fargo Retirement has seen a 10% year-on-year uptick in the number of loans.

An analysis of 1.9 million participants in employer-sponsored 401(k) plans recordkept by Wells Fargo found average loan size increased as well, by 8%. This trend was mostly driven by participants in their 40s and 50s.  

Wells Fargo also found a slow, steady decline in the single style or “pure” equity holdings of participants across the book of business; the majority of these assets are being shifted to managed investment products (such as target-date funds, model portfolios, balanced funds, AdviceTrack). Much of this shift toward managed investment products is concentrated in the younger and more recently hired participants, and is driven in large part by the prevalence of managed products as default investments.   

Seventy-four percent of participants now hold assets in some type of managed investment product.