According to a new study, consumers want the advice proposed by the Retirement Security Advice Act but want it to be unbiased and from an independent source.
Approximately 93% of those surveyed said that attaining unbiased financial advice would be an important addition to their 401(k) plans, according to the Scarborough Group, an Annapolis, Md.-based retirement planning firm that offers advice for employer-sponsored 401(k) participants. Also, 63% of the participants wanted those advisers to be independent of any specific mutual funds.
The Retirement Security Advice Act, or H.R. 2269, was reintroduced to the House in late June by Congressman John Boehner of Ohio, and it calls for 401(k) plan and IRA fiduciaries to be allowed to provide investment advice. The bill is currently going through a House markup session in preparation for voting.
Yet opponents worry that passing the bill would open the gates for mutual fund companies to give advice on their own funds without their clients best interests in mind.
"Thats our biggest fear," said Lynn Allen, vice president of the Scarborough Group, adding that the survey shows that "theres a certain part of the population who wants to make sure that advice is not related to the mutual fund companies they are working with."
The study, which surveyed 989 people who were either clients or potential clients of the Scarborough Group, found that approximately 92% said establishing a relationship with an adviser was also important to managing 401(k) plan.
Participants also griped about poor 401(k) education. An overwhelming 64% of participants said that the quality of their employers 401(k) education and services fell between poor and average.
The survey showed that 39% of the participants wanted employers to offer professional management for their plans, while 29% said they wanted at least face-to-face contact with a financial adviser. The top issues that consumers were interested in learning about included: retirement planning, market issues, 401(k) investing and college investing.
Allen said participants would be more willing to engage in employer 401(k) plan services if they had one-on-one advice because the information would be specifically tailored to their account. "More pro-active management would certainly help a lot of those who have fallen through the cracks," Allen said.
This story was adapted from a story appearing on Financial Planning Interactive.