Use of advisors and retirement plan performance
Date
2020Metadata
[+] Show full item recordAbstract
As DC plans become more popular than DB plans, American workers are increasingly responsible for their retirement savings. Because retirement plan participants' portfolio allocation is constrained by the available funds in the plan, the construction of a plan's investment menu has become extremely important. No research has evaluated fund selection in retirement plans or compared plans involving an advisor with self-directed plans. To fill this research gap, this study employs cross-sectional, nationwide data that include 5,570 retirement plans with 100 or more participants in 2013, 2014 and 2015. Results show that in most cases, using advisors is not related to plan performance. Plan sponsors should require advisors to periodically evaluate the performance of plans under their management using objective measures.
Citation
Original: Yao, R., Wu, W., & Mendenhall, C. (2020). Use of Advisors and Retirement Plan Performance. Journal of Financial Counseling and Planning. http://dx.doi.org/10.1891/JFCP-18-0008
Rights
OpenAccess.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 License.