September 17, 2024 | BlackRock Retirement Perspectives
Income is in the conversation
The majority (81%) of retirement plan advisors are discussing retirement income with clients.
Advisors are in on active
Over half (55%) believe active managers can consistently outperform the market.
Valuing participants is part of the strategy
Over half (55%) mention they differentiate their practice through expertise in meeting participant needs and education.
Retirement. It’s deeply personal. And nobody knows this better than the retirement plan advisors working first-hand with sponsors to understand and address the challenges their savers face.
That’s why we surveyed over 300 advisors as part of our annual Read on Retirement® research to better understand how they’re enhancing outcomes and growing their practice.
We found that in this period of volatility and uncertainty, plan advisors are looking to help plan sponsors build more resilient portfolios. They’re focused on implementing active and income strategies, and streamlining their practice management, including incorporating AI-powered tools.
Carrie Schroen, Head of BlackRock’s U.S. Defined Contribution Intermediary Business said, “In these uncertain market conditions, plan advisors are looking for solutions that will help more Americans achieve better retirement outcomes. Our research demonstrates the importance of access to affordable solutions and education, areas that are vital to providers and participants alike.”
Plan advisors are rallying around retirement income as a solution to help their clients’ employees invest for the long-term. 81% report discussing retirement income with DC clients, but they also report there are some barriers, like communicating a clear benefit in terms of improved outcomes (44%) and providing clear participant education and communications (42%).
These barriers, though, could be an opportunity for plan advisors to add value: 59% mention their defined contribution clients reach out to them for providing participant education and communication on retirement income.
Over half (55%) of plan advisors believe that active managers can consistently outperform the market and, when it comes to the value of active, they cited these benefits the most: access to more investments (59%), protection against loss (47%) and sector choices (44%).
Plan advisors aren’t just recommending active solutions on a whim, though. They are evaluating solutions, and when it comes to that they cited access to a cost-effective strategy as the most important factor (71%). They also ranked diversification (66%) and manager expertise (60%) as important factors.
Plan advisors are taking an active approach to their own businesses, too, identifying how they can differentiate themselves from the pack. 55% say they do this through their expertise in meeting participant needs and education (including advice and retirement readiness). 48% are currently offering financial wellness plans for their clients, and 30% plan to add assistance with participant communications in the next year.
The data also shows that plans to use AI to streamline practice management are growing. While only 9% of plan advisors are currently using AI-powered tools, 53% report being likely to use them in the next 12 months.
BlackRock worked with the Bipartisan Policy Center to lift the veil on how to optimize retirement income – and the role policymakers have to play in advancing financial security.
New-in plan solutions are on the horizon. What have years of research taught us, and how can 401(k) plans benefit?
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The 2024 BlackRock Read on Retirement® survey provides insights from a research study of over 450 large defined contribution plan sponsors, 300 retirement plan advisors, 1,300 workplace retirement plan savers, 1,300 independent savers and 300 retired workplace savers in the United States. The survey is executed by Escalent, an independent research company. All respondents were interviewed using an online survey conducted between January 29 and March 7, 2024.
This material is provided for educational purposes only and should not be construed as research. The information presented is not a complete analysis of the global retirement landscape. The opinions expressed herein are subject to change at any time due to changes in the market, the economic or regulatory environment or for other reasons.
The material does not constitute investment, legal, tax or other advice and is not to be relied on in making an investment or other decision.
The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by BlackRock, Inc. and/or its subsidiaries (together, “BlackRock”) to be reliable. No representation is made that this information is accurate or complete. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
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Asset allocation models and diversification do not promise any level of performance or guarantee against loss of principal.
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