New Evidence on the Demand for Advice within Retirement Plans

April 2017

Many retirement plan participants lack the financial knowledge needed to manage their portfolios on their own, underscoring the importance of advice.

Summary

Using participant-level data from TIAA, this study sheds new light on demand for advice within retirement plans. In addition to examining how demand varies based on participant demographics, the authors explore how demand is affected by default investment options and the means by which advice is offered.

Key Insights
Demand for advice on asset allocations and income planning increased four-fold among study participants after online advice tools were introduced.
Older participants and those with larger account balances are more likely than others to seek out advice.
Demand tends to be higher among plan contributors than non-contributors and is significantly higher among contributors with web access.
Methodology

The authors studied a sample of participants at 23 employers that used TIAA as their sole plan recordkeeper between the years 2009 and 2014. Using several statistical models, they identified trends in demand for advice and fluctuations based on different conditions. They also predicted the likelihood that participants would seek out various types of advice.