Fidelity Reports Almost All Plan Sponsors Lean on Advisers

More than nine out of ten (92%) plan sponsors work with advisers for consultation and management—up two percentage points from last year, according to Fidelity Investments’ 16th annual Plan Sponsor Attitudes Study, released today.

Sponsors’ satisfaction with those advisers is strongly linked to participants’ retirement readiness, the researchers found. While 74% of those who felt participants are saving enough for retirement reported high satisfaction with their advisers, 58% of those who felt participants are not saving adequately still reported high satisfaction.

“Year over year, we see that plan sponsor satisfaction is a powerful indicator of adviser value,” wrote Chris Alpaugh, Fidelity’s head of defined contribution investment only sales group, in an email to PLANSPONSOR. “When sponsors believe their employees are on track for retirement, satisfaction jumps—a clear signal that participant outcomes drive adviser impact.”

Struggling With Retirement Readiness

The study revealed that fewer plan sponsors (67%) than last year agreed their participants are saving enough money for retirement, down from 82% last year and 68% in 2021.

Plan sponsors surveyed by Fidelity said their participants are finding it increasingly difficult to save more for retirement due to: living expenses (30%); health care costs (18%); education expenses or loans (11%); lack of education (10%); lack of discipline (10%); distrust of financial markets (10%); and indecision or inaction (9%).

Moreover, a BlackRock survey published on September 8 found that only 38% of employers believe at least 60% of their employees are on track with their retirement savings—the lowest percentage since the company began fielding its survey in 2016.

What Can Advisers Do?

“This year, we saw that plan sponsors were increasingly seeking financial education and financial wellness programs,” Alpaugh continued in his email response. “It’s no surprise that it’s a challenge for plan sponsors to stay informed and that they are turning to their advisers for guidance.”

Those surveyed said they would like their advisers to provide content and education about financial planning (38%), financial wellness (35%) and retirement income (28%) over the next year. Among plan sponsors, 30% cited targeted education meetings as a way to improve newer employees’ engagement.

More than two-thirds (69%) of plan sponsors who implemented financial wellness programs called them “very impactful.” However, only about half (54%) of employees are currently enrolled in financial wellness programs. It follows that of the 93% of plan sponsors who have instated a financial wellness program, more than half (60%) did so within the past year.

The study indicated that advisers can add value by helping plan sponsors understand and adjust plan designs to meet participants’ changing needs. Half of sponsors surveyed said the pace of change in administering retirement plans is “exhausting” and causes employee burnout.

“Advisers seeking to build stronger relationships can provide resources to help simplify the complexity of our rapidly evolving legislative and market environments for plan sponsors,” Alpaugh wrote.

In 2024, plan sponsors selected retirement income products (53%), managed accounts (48%), collective investment trusts (43%), new target-date funds (37%), pooled employer plans (31%) and health savings accounts (20%) as investment products relevant to their plans. This year, plan sponsors continue to navigate selecting nascent products and investment lineups.

“With investment menu options and compliance policies quickly evolving, it’s not surprising that sponsors are leaning on their advisers to be the steady hand helping keep participant success in focus,” Alpaugh said in a statement.

The Fidelity Plan Sponsor Attitudes Study was conducted online in January by polling 1,144 plan sponsors, each with at least 25 participants and at least $3 million in plan assets. Fidelity was not identified as the survey sponsor to respondents.