Interesting but not shocking results from Fidelity Investments' 15th Annual Plan Sponsor Survey conducted in January 2024 with 1,174 plans with at least 25 participants and $3 million in assets that do not necessarily use Fidelity's recordkeeping service.

One of the more shocking statistics from past years predicted 40%-50% advisor turnover, which is interestingly absent from the 2024 study, perhaps because many industry professionals doubted the veracity of this number.

It's clear that advisors working with 90% of plans are being asked to go beyond fees, funds and reliability by bringing new ideas and services, including:

• Convergence of wealth, pension and benefits

  • 50% of plans indicated that HSA guidance is important
  • 26% are planning to implement emergency savings plans
  • 81% reported that it was okay for counselors to work with participants outside of the plan

• Automatic features

  • Plans to use advisors more inclined to implement automatic features
  • 32% reported that they intend to implement auto-escalation, with 28% increasing deferral rates already

• InveStment

  • 90% reported a change in their menu
  • 60% estimated fund performance on target date above cost
  • 26% said direct contact with TDF managers was important
  • Another 32% added CIT, much more likely

Overall satisfaction with advisers, at 81%, was up from 63% in 2019 and 76% last year, and 78% thought their adviser provided good value, but again, how would they know?

Beyond convergence, which most people believe is inevitable, with 86% indicating it is not a fad in a recent LinkedIn survey, there have been some surprises, such as the increased use of CITs, likely the result of advisors pushing and educating clients, and the value of performance over a myopic focus on cost. Common practices for larger plans, such as increasing auto features and direct contact with investment managers, are migrating to the marketplace with more to come, driven by savvy advisors.

The pending questions are what effect the fiduciary rule, if ever implemented, will have, not only on the plan, but also on how advisers will interact with participants when they terminate or retire, and the potential incursion of wealth managers in DC plans not only to serve clients, but also mine for wealth management prospects and keep other advisors out. And what role will group plans like PEPs, as well as TPAs, play in the future?

In the last one Zoom 401k Coffee meeting with plan sponsors on how to better utilize their advisors, only 12% of plan sponsors gave their advisor a high rating, while twice that number gave them the lowest score. Fifty-eight percent of plans have been with their advisor for five or more years, while 11% indicated they didn't have one or didn't know if they had one. About two-thirds have either never performed a proper RPA analysis, or more than five years have passed.

There's no doubt that plan sponsors starting at $3 million are waking up and going from being largely unknowingly disabled before the pandemic to consciously disabled, driven by the fight for talent that borders on conscious ability. All of this is good news for experienced RPAs and will undoubtedly increase adviser due diligence activity from plans that have been educated by their adviser on investment benchmarking and periodic data keeper RFPs they are not just good practices; they are required for ERISA fiduciaries paying advisor fees outside of plan assets.

Fred Barstein is the founder and CEO of TRAU, TPSU and 401kTV.