AARP Survey: Plan Sponsors Want 401(K) / 403(B) Providers to Give Advice in Best Interest of Participants

According to a newly released AARP study, 89 percent of plan sponsors would like defined contribution plan providers to be required to meet fiduciary standards when offering investment advice to plan participants. Moreover, 78 percent would be “very likely” or “somewhat likely” to require providers to offer advice in the best interest of participants even in the absence of a government mandate.

Approximately two-thirds of the plan sponsors have engaged a provider that offers investment advice or consultation to plan participants.  While most of the 3010 survey respondents expressed confidence in their own providers, more than half acknowledged that a provider’s advice “may be influenced by the money that the provider makes from the plan investments.”

The Department of Labor is expected to issue guidance on the fiduciary obligations of investment advisors in August.  In the interim, plan sponsors should review their current contracts with defined contribution plan providers in order to understand whether the “best interest” standard is currently in force.

To read the full survey report, click here.