Can professional advice help improve employees' financial success? Seventy-one percent of Americans are interested in getting it, according to the TIAA 2016 Advice Matters Survey1. In fact, 77 percent of those who have met with a financial advisor regret not seeking help sooner.
And they are looking to employers to fill the advice gap. When asked to select among various free perks an employer could offer, advice was the most popular choice. One-third say they would like access to a no-cost financial advisor, compared to 17 percent who say they would prefer free on-site medical care or 12 percent who wanted free lunch prepared by an on-site chef.
As a plan sponsor, you can meet the demand by offering advice services through your workplace retirement plan. As a first step, you can take stock of what you offer now to assess if your employees are getting what they may need or want. Step 2: Explore how to best fill any gaps effectively and cost efficiently. Step 3: You may also want to work with your retirement provider to increase your employees’ awareness and usage of those services.
Many Americans (46 percent) haven’t received professional financial advice. Understanding who hasn’t received advice can help identify groups of people that could benefit from targeted education.
With these insights, you can then zero in on what strategies could help participants in your plan.
Understanding why employees have not sought advice is the key to getting them to engage. Among the reasons respondents gave, misperceptions were the main block. More than half (51 percent) don’t think they have enough money to invest. They also have concerns about cost and affordability (45 percent). Still, others don’t know where to look for professional advice (22 percent), or they simply feel they are too young for it (10 percent).
As part of your educational efforts, consider:
You may also want to review your current advice services, and consider:
Among those surveyed who have met with a professional advisor, only one-fourth (25 percent) say the advisor was through the retirement plan offered by their employer, and an additional 19 percent say their employer provided the advisor. Nearly half (48 percent) of those who have worked with an advisor chose one not affiliated with their employer.
However, that mindset is changing with younger generations: 64 percent of baby boomers worked with an advisor not affiliated with their employer—compared to only 27 percent of Millennials.
This presents an opportunity to interest more employees in receiving financial advice. You may also want to consider this: Three in four Americans say they would be more likely to consider a job if no-cost financial advice were offered.
Professional advice designed to help employees manage their overall finances may help improve their retirement outlook. What’s more, a majority of Americans (61 percent) who have met with an advisor say they feel confident about their finances. The statistics make the case for informing employees of your plan’s advice offerings—sooner rather than later.
This material is for informational or educational purposes only and does not constitute a recommendation or investment advice in connection with a distribution, transfer or rollover, a purchase or sale of securities or other investment property, or the management of securities or other investments, including the development of an investment strategy or retention of an investment manager or advisor. This material does not take into account any specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made in consultation with an investor’s personal advisor based on the investor’s own objectives and circumstances.
1 The TIAA 2016 Advice Matters Survey was conducted by KRC Research online among 1,000 adults, age 18 years and older living in the United States, from Aug. 10 to Aug. 15, 2016. The sample was proportionally obtained by demographics such as age, gender, region and income to ensure reliable and accurate representation of the national population age 18 and older.
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