Rodney Dangerfield, Financial Advisor
Rodney Dangerfield, the late comedian, was famous for telling audiences, “I don’t get no respect.” It’s understandable if financial advisors may be feeling the same way lately.
Lately, it may seem like both individual and institutional investors are placing less value on the importance of human guidance, experience and interaction for investment matters. It appears that robo advisors are on the rise, passive investments are edging out active funds in popularity, and web-based investment tools are proliferating.
It’s enough to make any self-respecting advisor feel unwanted – something Rodney could relate to as a child: “When I was a kid, my parents moved a lot but I always found them.”
The truth is, advisors are deserving of respect as they make a big difference, especially in the retirement plans marketplace. The 2016 MassMutual Winning Combination study found that employers who relied upon an advisor enjoyed significant advantages over employers that did not. Consider that employers who used advisors were more likely to:
Encourage their employees to participate in their retirement plan (74 percent of advisor-supported employers encouraged participation vs. 65 percent of non-advisor-oriented employers);
Urge employees to take advantage of other benefits outside of the retirement plan (61 percent vs. 49 percent); and
Encourage employees to increase contributions to their retirement plan (55 percent vs. 35 percent).
The actions on the part of employers – at the behest of their advisors – had a significant impact. Employers who relied on advisor were more likely to promote their employees’ overall financial well-being than employers without advisors (48 percent to 33 percent, respectively) and were more likely to assert that their employees were saving enough to retire on their own terms (37 percent vs. 30 percent, respectively).
It’s welcome news in today’s retirement plans marketplace, where employers are increasingly focusing on the retirement readiness and the financial well-being of their employees.
MassMutual’s study also showed that employers valued advisors who stressed employee education, good service and could help with managing their fiduciary obligations. Advisors who can articulate a meaningful value proposition, the study showed, have an edge in the marketplace.
Rodney once said that, “Life is just a bowl of pits.” For advisors who stress their value in helping make retirement plans more effective, it’s more like an ice cream sundae – with a cherry on top.
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E. Thomas Foster Jr. is head of strategic relationships for retirement plans for Massachusetts Mutual Life Insurance Co. (MassMutual).
This article is for informational purposes only and should not be construed as legal, investment, and/or tax advice. Please consult your own legal counsel and other experts regarding the specific application of the information set forth herein to your own plan and/or circumstances.