Cross employers off the list of potential competitors to financial advisors, as far as advising retirees on how to manage their money is concerned. A new survey sponsored by BlackRock shows that employers who offer retirement plans feel less responsibility for helping their employees after they’re retired than the employers do when their workers are still on the payroll.
Just 17 percent of plan sponsors said they felt “a great deal of responsibility” for helping employees make sure their money lasts through their retirement, and only 14 percent felt “a great deal of responsibility” for helping employees safeguard their assets in retirement. The plan sponsors, in comparison, felt much greater responsibility for helping workers understand retirement plan investment options (83 percent), providing incentives to save and invest for retirement (56 percent), and contributing money to retirement nest eggs (43 percent).
What’s creating tension is a strong desire by employees for advice on how to manage their nest eggs once they’re retired and spending the money, the survey showed. And part of what’s driving sponsor reluctance to provide that advice is a lack of regulatory guidance on their fiduciary obligations should they decide to do so, BlackRock says.
The online survey of 119 corporate executives, responsible for their company’s defined contribution plans, was conducted in March by Boston Research Group. They represented plans totaling $525 billion in assets and 4.1 million participants.
Since employee interest in revenue streams during retirement is high, look for more annuity products in DC plan offerings in coming years.