Advisers Can Shine While Supporting Stock Plan Investors

Morgan Stanley at Work has published the results of a new survey of some 40,000 U.S. stock plan participants.

According to the analysis, nearly 40 million Americans quit their jobs in 2021, in what economists have called the Great Resignation. With the demand for talent increasingly outstripping supply, and a third of U.S. workers considering a job change in the next year, employees are paying more attention than ever to their financial security and their emotional and physical well-being in the workplace. They are also reassessing the types of benefits they want and expect.

The new Morgan Stanley at Work analysis suggests stock plan benefits may enable companies to both attract and retain talent, yet stock plan participants broadly lack a high degree of confidence and knowledge about their benefits.

According to the survey, most stock plan respondents (75%) feel confident in their ability to access their stock plan account, but only about half understand how to sell their stock plan shares. Still fewer, about a third, report understanding how to estimate the potential tax impact of their stock plan benefits.

Equally few respondents feel confident in maximizing the financial potential of their stock plan benefits, and, as such, some four in five stock plan participants believe their companies should play a role in educating and advising them about the benefit.  

Respondents are eager to learn about their stock plan and are actively looking for information—online via their stock plan platform or company intranet, as well as through periodic emails and one-on-one consultations with financial advisers. The survey concludes that companies can financially empower their employees to meet long-term goals while driving their loyalty.

A collective 78% of respondents are either satisfied or very satisfied with their stock plan benefit. A scant 2% were very dissatisfied, and 5% were somewhat dissatisfied. The remaining 15% are neither satisfied nor dissatisfied.

Only 16% of those surveyed had called their stock plan service center during the prior year, but the vast majority of these, more than 80%, agreed that their call center professional was knowledgeable and helped them resolve their inquiries in a timely manner.  

When it comes to those survey participants who had sold stock shares, 28% put the proceeds into a checking or savings account, while 10% transferred the proceeds to another brokerage account, which is the same proportion that spent the cash in the short term. Perhaps most striking, some 4% of respondents admitted to not knowing or not remembering what they did with their stock plan sale proceeds.

A sizable majority of respondents agreed that the stock plan is one of the reasons they have chosen to stay with their current employer. Many also agree with the statement that the plan is a good way for the company to demonstrate its appreciation of employees.

In terms of the type of information stock plan investors would like to get more of, they cited guidance about how their stock sales might impact their taxes. They would also like more information about how to potentially maximize the financial benefit from their stock plan holdings.