Increasing numbers of higher education institutions are seeking the services of financial advisors and consultants, but they are looking for more of a personal touch.
Forty-two percent of institutions surveyed say they already use an advisor or consultant, and this trend is expected to grow by 10 percent over the next year, according to Transamerica Retirement Solutions' report, "Retirement Plans for Institutions of Higher Education."
The study focused on institutions with either a 403(b) or Roth 403(b) plan, which represents 96 percent of higher education institutions.
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Advisors perform many functions for these institutions, including selecting investment options, monitoring investment options, assisting with plan design, developing a plan's investment policy and selecting vendors and reviewing plan compliance.
"Advisors and consultants are powerful allies in retirement plan management," said Brodie Wood, vice president and national practice leader, not-for-profit for Transamerica Retirement Solutions. "By increasing the use of advisors, higher education institutions can continue to effectively navigate the many changes taking place regarding retirement plans."
Though on-site participant counselors are not common in the corporate world, they are pretty routine in the higher education universe. Private institutions (59 percent), those with fewer than 5,000 eligible employees (58 percent), those with multiple vendors (60 percent), and those partnering with an advisor (58 percent) are most likely to have an on-site participant counselor.
With these on-site visits, higher-than-average contribution levels and up-to-date plan design, the higher education industry has made significant strides to improve the retirement security of plan participants.
On average, the industry's participants defer 13.4 percent of their pay to defined contribution plans.
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