|Majority of 401(k) Participants Want to Work with a Financial Advisor, Yet Barriers Persist, Financial Engines Survey Shows|
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Overwhelming Majority of Participants Say They Want an Advisor Legally Required to Act in Their Best Interests
Strong Desire for an Advisor That Meets the Fiduciary Standard
When asked about the desired attributes of a financial advisor, 69 percent of participants said that it was “very important” that their financial advisor be legally required to act in their best interest. Another 18 percent said that it was “somewhat important.” Less than two percent said that their advisor being a fiduciary was “not very” or “not at all” important.
Groups who stated that an advisor’s fiduciary status was very important
included investors who use target date funds (76 percent), investors not
currently working with an advisor but interested in doing so (73
percent), those with assets between
“While technology can broaden the access people have to investment
advice, we’ve found that many people value the ability to talk with a
professional advisor, whether just to ask questions or to develop their
retirement plan,” explained Kelly O’Donnell, a
Despite Desire, Barriers Persist
Despite the desire to work with a financial advisor, the most commonly cited barriers included affordability (46 percent), believing they didn’t have enough assets to get an advisor’s attention (36 percent) or uncertainty how an advisor could help them (26 percent). Twenty-three percent of investors said that they preferred a do-it-yourself approach to handling their investments.
The Human Touch
While interest in online advisory services was strong (60 percent), it was even stronger for services that included access to financial advisors (68 percent). According to respondents, the top reasons people use financial advisors included the ability to avoid costly mistakes (44 percent), greater peace of mind or more confidence (28 percent) and the ability to further personalize financial plans and strategies (25 percent).
The financial topics of most interest to participants went beyond traditional retirement planning. According to the report, 401(k) participants are most interested in receiving help with:
“It’s easy to underestimate the power of a simple conversation with someone who listens to your concerns and can provide valuable insights and help. However this research validates our own experience about the important role advisors play in helping investors reach their goals,” said O’Donnell. “Financial Engines is committed to making our advisors even more accessible to help retirement investors better save and plan for a rewarding retirement.”
Copies of the report “The Human Touch: The Role of
Advisory and sub-advisory services provided by
This press release contains forward-looking statements, including
statements regarding the use of professional investment and financial
planning help, which involve risks and uncertainties that could cause
actual results to differ materially. These risks and uncertainties are
outlined in our
2 For independence methodology and ranking, see InvestmentNews Center (http://data.investmentnews.com/ria/).