Lately, regulators have given substantial attention to the retirement landscape of the American workforce. This scrutiny has resulted in significant legislation fo-cused on the investment industry and its responsibility to help encourage the American workforce to be better prepared for retirement.
According to a recent article in Plan Advisor magazine, in order to be more effective and responsive to the long-term financial planning needs of the American public, the investment industry and its professionals need to move from a performance-driven culture to one that is more purpose-driven. John Resnick, vice president in charge of advisor development for Efficient Advisors, says that in the future we are all going to be moving further away from a commission-based and product-based view of the world in favor of a relationship and advice-based view. This shift is the driving force behind the new Department of Labor (DOL) fiduciary rule that essentially is raising the level of accountability for advisors in an effort to ensure fair and transparent advice.
This heightened accountability is in response to the state of retirement readiness across the country. According to a recent Fidelity survey, America’s savings rates are low but fixable. Millennials ages 25 to 32 are saving 7.5%, Gen Xers ages 33 to 50, 8.2% and Baby Boomers ages 51 to 69 are saving 9.7%. This is still below the 10% to 15%, including employer contributions, the Fidelity survey believes workers should be saving.
Another survey by the Teachers Insurance Annuity Association revealed some of the biggest issues threatening retirement security. 50% of people say their number one retirement objective is generating a reasonable guaranteed monthly income, and 41% don’t know if their plans offer an income solution. Receiving financial advice and direction at no additional cost was the most popular option among various perks an employer could offer – even outranking on-site medical care or free lunch prepared by an on-site chef.
With these statistics in mind, Master’s has become more intentional about serving company retirement plans so that the workers they serve can be prepared when they are ready to step into a new phase of life. We focus on working with individual employees to assess their retirement readiness and suggest ways to become more prepared for retirement. We also have a heightened awareness of the fiduciary responsibility that falls on the sponsoring company and us, as the investment advisor, to protect businesses from failing to execute their responsi-bilities. We are committed to doing our part in addressing the retirement readiness of employees enrolled in the plans we serve and are proud to be a partner in preparing participants for their next stage of life.