Even though nearly four in 10 (38%)
of defined contribution (DC) plan participants feel they don’t have
enough assets outside their DC plan to warrant having an adviser, and
more than one-quarter (28%) say they cannot afford a financial adviser,
only 18% of current plan participants have entrusted their plan provider
with outside assets.
According to a new Spectrem Group report,
Advisor Usage Among DC Plan Participants, “In many cases, this is simply
a matter of poor communication, as more than four out of ten (43
percent) plan participants would consider transferring outside assets to
the provider if they were aware of the providers’ full range of asset
management capabilities, fees, etc.”
As for keeping DC assets
after participants leave a plan, 51% of plan participants whose plan
provider currently manages a portion of their outside assets would
consider moving their DC assets to an IRA with their provider.
study found the motivation for moving outside assets or DC plan assets
to the provider varies. Among women, the most important criteria for
moving assets to their DC provider is a feeling of trust, security and
safety. Among men, investment performance drives their decision making.
Providers who tailor their communications to address these expectations
are likely to have the greatest success retaining and gaining DC
This report is based on a survey of 866
401(k), 403(b), and 457 plan participants who have a household net worth
of at least $100,000.