The Rules of Engagement

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External forces confronting the 401(k) industry including the Department of Labor fiduciary rule, provider consolidation due to pricing pressure, and the heavy volume of litigation over excessive fees continue to push plan sponsors to hone in on cost reduction and reevaluate expenses related to all aspects of plan administration and investments. Yet managing plan costs is just one of the two top challenges facing plan sponsors—plan sponsors are equally focused on the daunting task of adequately preparing participants for retirement.

Not shying away from the ultimate charge of participant retirement preparedness, plan sponsors are thinking creatively about how to better engage with employees. No longer content with automatic plan features that encourage inaction, more plans are now offering an employee match while others are extending beyond the 401(k) plan to a more holistic level of overall financial wellness. This broader approach takes more immediate needs such as credit card debt and student loans into account, thus providing a more realistic perspective for employees on their own role in retirement savings.

The same cannot be said of the tactics plan providers and DC investment managers are employing to connect with plan sponsors. Despite the plethora of avenues at their disposal, very few providers are successfully engaging with plan sponsors outside of advertising. Compounding the issue, very few plan sponsors go out of their way to seek information beyond what is provided by the firms they already use. That said, consultants and financial advisors have the plan sponsor’s ear on a regular basis and can be valuable allies for the providers that can effectively cultivate endorsements from these influential players.

The 2017 Retirement Planscape® study, released to clients this week, offers an in-depth evaluation of the 401(k) industry from the perspective of plan sponsor decision-makers. The report provides a thorough assessment of current priorities and challenges for plan sponsors, plan design practices, use of intermediaries, trends in investment menu design and a competitive analysis of the leading plan providers and DC investment managers. Results are based on responses from more than 1,400 plan sponsors representing 401(k) plans with asset levels ranging from less than $1 million to more than $1 billion.

From key reasons for switching providers to the latest trends in plan administration including financial wellness programs and offering “robo-advice” to participants, Retirement Planscape delivers insight to plan providers, financial advisors and other intermediaries as well as investment managers, all of whom ultimately contribute toward adequately preparing participants for retirement.

For a sneak peek at more findings from this year’s report, download our webinar, Upping Engagement with 401(k) Plans.
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This entry was posted in Brand and Messaging, Financial Services and tagged , , , by Julia Johnston-Ketterer. Bookmark the permalink.
Julia Johnston-Ketterer

About Julia Johnston-Ketterer

Julia Johnston-Ketterer is a senior director in the Syndicated division. She has more than 15 years of experience leading research initiatives on the client- and supply-sides of the financial services industry focusing on investors, advisors and broker-dealers. Prior to joining Market Strategies, Julia was vice president of business development for Market Probe, Inc. and research associate for Richard Day Research, where she managed financial services clients and conducted client satisfaction studies and PR research programs. Julia also spent ten years at Fidelity Investments. While there, she built a research team that provided primary and secondary research to internal marketing and communications partners. Julia earned an MBA in finance and communications from Simmons School of Management and a bachelor’s degree in French and international relations from the University of Wisconsin-Madison. While she can claim having twice bungee-jumped in New Zealand, Julia’s current adventures outside of work include being a hockey mom, taking hikes with her dog and planning her next family beach vacation.

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