Plan Participants Prefer One-on-One Advice to Group Sessions

Eighty-eight percent of participants want one-on-one training on their retirement plan, PlanVision found in a survey. PlanVision said this could be due to participants not wanting to appear uninformed in front of colleagues. Only 21% would like the training in a small group, 18% via webinar, and 8% in a classroom.

Nearly all respondents, 96%, want personal guidance during enrollment. Ten percent have no understanding of investments at all, 34% have a limited understanding of investments and 34% said they understand investments reasonably well but would like assistance.

Nearly six out of 10, 58%, don’t know if they’re on track for retirement. Among this group, 70% would like a personalized retirement plan. Only 18% said they feel that they are on track. Among this group, 48% had worked with an adviser. Nearly one quarter, 23%, said retirement was too far away for them to have a good sense of whether they are on track or not.

Asked about risk tolerance, 80% said they ranged from moderate to aggressive. Only 18% said they were conservative or moderately conservative investors. “Most investors are willing to include volatile investments in their portfolio,” PlanVision said. “They understand the long-term nature of the investment and the trade-off of losing money in the short run to have more in their retirement account.” In fact, experts advise investors, even those approaching retirement because of the many years they will face in retirement, to ignore volatility.

After being given an explanation of fees, 95% said they understood them, with the majority (96%) saying they understood how fees impact their long-term returns. “This is a good sign, and a great start toward helping employees understand their retirement benefits,” PlanVision said. “This should also have a spillover effect and help people become better consumers of investment products on their own.”

PlanVision concluded: “The notion of retirement readiness is emerging in the defined contribution industry. Employer-based retirement plans are expected to play a key role in helping people of all types pursue more flexibility in their retirement years.” PlanVision’s full report can be downloaded here.