Fewer than 45% of participants with access to 401(k) investment advice say they have tried the process, according to “The Changing Face of 401(k) Participants: A Profile of the Self-Directed Retirement Generation” from the Spectrem Group.
The report notes that just over half of those who have tried the product have fully implemented the recommendations.
As evidenced in other surveys, Spectrem reports that most employers are reluctant to offer the advice for two reasons:
- concerns about the fiduciary liability if an employee is not satisfied with the investment results after acting on advice offered through the company plan
- the cost of offering these services
The Spectrem study found that the plan sponsor paid for the advice nearly three quarters of the time.
However, the study found that participants get advice from other sources. Of the roughly 25% that seek advice outside the plan:
- 40% consult independent financial planners
- 20% cite mutual fund representatives as sources
- 18% rely on stockbrokers.