SURVEY SAYS: Will Your Plan Offer Advice Next Year?

November 30, 2006 ( - A few weeks back, I asked readers to opine on what impact they thought would result from the provisions of the Pension Protection Act.

But with only a few weeks left in 2006, this week we asked readers if they planned to expand participant access to investment advice via fiduciary adviser(s) next year?

The response rate was a bit lower than usual this week (some still sleeping off that turkey, apparently), but no less interesting.   More than one-in-five were already offering advice, including the reader who said, ” We are fiduciaries for picking this vendor, but the employee enters into a contract directly with the vendor.   We do not “sell” or push the product, just make it one of the approaches to investing in our plan.”  However, they went on to note, “We have very few employees taking advantage of it because they have to pay for it.”

A comparable 21% said they “definitely” planned to do so next year, and 5% even said they planned to do so “enthusiastically.”   One looking ahead to next year said, “We walk the line between education and advice with our employees in our pension and 401(k) plans, and have for a long time.   After all, we are an employee benefits broker and consultant.   Retirement plans are part of that.   However, we are contracting with an outside firm to act as a Fiduciary Advisor beginning 1-1-07.   We understand some of our employees are reluctant to discuss their financial matters with a “fellow co-worker” and we see this as an added benefit to our retirement plans.”

However, roughly 16% said they were not planning to do so, and another 6% said they “probably” wouldn’t (among this group was a reader who admitted, “While we promote the idea to our clients by offering an independent companies investment advice services our HR department is still “considering” the idea for our own employees…” ).   Among the remaining respondents, 14% said they weren’t sure, including one reader who noted, “Once again, new laws stir up the marketplace and we want to see what shakes out.”  Another 16% were still “thinking about it”, and 2% said “other” (including one who observed, “We have an in-house advisor so it is a case of hog tying him to get an answer to any questions you may have. I suspect that not that many employees use his services as hog tying is not in our training manual.”

But this week’s Editor’s Choice goes to the reader who said, “We will absolutely use our plan advisors to expand our participant access to investment advice as soon as it gets “blessed” by their compliance department… and our compliance department…and our ERISA legal counsel…hopefully before the end of 2007…”

Thanks to everyone who participated in our survey!