Advice By Number
The PSCA’s 2001 Investment Advice Survey also revealed that advice was most prevalent in member companies with 1-49 employees (41.4% provided advice) and those with 1,000-5,000 employees (41.2%). It is least prevalent in member companies with 200-999 employees – where only 8.3% provided advice.
- among member companies employing between 50 and 1999 workers, only 15% offered advice,
- among member companies employing over 5,000 workers, only 15.8% provided such a service.
Among those who do not offer advice, 93% cite “fiduciary concern about liability for advice that results in a loss, even if the advisor is competent and there is no conflict”, as the chief reason for not doing so.
- “fiduciary concerns about ability to select a competent advice provider under ERISA ‘prudent man’ standard,” was identified by 91.1% of the sample,
- “fiduciary concern about ability to monitor advice provider under ERISA ‘prudent man’ standard,” was chosen as a reason by 90.2% of the sample,
- “fiduciary concern about ensuring that the advice provider has no conflict of interest,” was checked by 83.8% of the sample
- some 68.7% cited the cost of providing advice as a reason, and
- a little over a third said that investment advice was unnecessary.
The findings are based on data collected from 141 member companies.