7. More recommendations for features than investments. Advisors must advise. So what recommendations did advisors make?

  • 84 percent of advisors surveyed recommended auto-enrollment
  • 76 percent contribution acceleration
  • 58 percent reenrollment of all eligible participants
  • 50 percent of advisors surveyed recommended a stretch match

But when it comes to investment recommendations, fewer advocated for them:

  • 44 percent said they had recommended a reset of investment elections to a QDIA/target-date fund
  • 30 percent had recommended CITs
  • 21 percent had touted managed accounts
  • 10 percent had encouraged ETFs
  • 9 percent had recommended investment options designed to generate income in retirement

6. Litigation over plan design. A surprising 39 percent of advisors are finding that sponsors' decisions on plan design recommendations are being influenced by litigation trends.

It's not clear, however, whether that influence is a positive or a negative thing.

A bigger concern is sponsors’ receptivity to investment recommendations, with 38 percent saying litigation was an influence on sponsor receptivity and 28 percent saying it was “sometimes” an influence.

5. Health savings accounts. The triple tax advantages of HSAs make them an ideal retirement savings vehicle. And who better to deal with that than a retirement plan advisor?

In fact, at one session during this year's Summit, one presenter talking about HSAs asked attendees, in so many words, "Do you really want benefits brokers deciding where the investments will go?"

But when push comes to shove, HSAs are tied to health plans, not retirement plans. And almost half of respondents said that was one of the biggest challenges in advising plan sponsors about such plans.

But HSAs offer other challenges too:

  • 36 percent of advisors said that they had difficulties in finding trusted HSA administrator partners for their clients
  • 32 percent cited issues with understanding compliance regulations
  • 30 percent noted “low investment opportunity and potential”
  • 27 percent were concerned about consumers’ ability to save health care dollars

4. Passive investments. Although most advisors (78 percent) said “it depends” when asked if they use passive over active investments, it’s not necessarily because they think they’re so terrific:

• 34 percent of advisors use them to cut plan costs
• 22 percent say they use them because of sponsor demand
• 15 percent say they use them all the time
• 7 percent said they never use them

3. HYPE-r-active. Advisors regard some industry trends as “overhyped,” chief among them robo-advice. A quarter of respondents said that robos are getting more attention than their due.

Advisors focusing on plans with more than $100 million in assets were even more critical—nearly a third of them downplayed the importance of robos.

Another trend advisors were critical of is environmental, social and governance investments (16 percent), which are actually growing in popularity among investors. (Interestingly, although advisors are critical, 26 percent of advisors’ clients already use them in their plans.)

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2. Administrative burdens. Advisors say that the plan sponsors they work with are frustrated with a decline in service levels and lack knowledge and understanding of plan provisions.

One respondent is quoted saying, “As recordkeeping costs decline, so does the service level. Recordkeeping business models have become segregated, so the primary relationship manager is less involved with plan details since he/she is now managing significantly more plans.”

As a result, sponsors are experiencing an inability to keep up with the administrative tasks and the complexity of requirements they must satisfy.

1. Client retention. The most prominent among issues cited by advisors, client retention is a big worry, with 24 percent characterizing it as “very important” and another 33 percent as “important.” And how much advisors charge, as well as how they regard and track fees, can play a major role in retention.

When combined with fee compression (“very important” to 19 percent and “important” to 38 percent), 31 percent of advisors say that they’re tracking profitability on a per-plan basis.

While there hasn’t been a wholesale lowering of fees to deal with the fee compression issue, and by extension, client retention, more advisors (27 percent) are only tracking profitability per plan “sometimes,” while 20 percent said they weren’t and 22 percent said they weren’t … yet.

And 37 percent are charging more for more service, while 33 percent say they’re charging less for the same service and only 21 percent say they’re charging smaller fees for more service.

Most professionals take a positive stance when talking business, including advisors. But behind the smiles are some very real concerns. To learn more, the National Association of Plan Advisors surveyed attendees at its annual 401(k) Summit this spring.

“We wanted to take advantage of the largest gathering of retirement plan advisors in the nation to get their sense of their current challenges and future trends,” said Nevin Adams, Chief Content Officer, American Retirement Association, and Editor-in-Chief of NAPA-Net the Magazine, which conducted the Summit Insider survey.

The survey offers a look at some of the top issues advisors are facing in a changing industry. Here are seven of them.