Trends in Participant Services

shutterstock_353531531_blogOver the past couple of years, defined contribution plan recordkeepers have modified their set of services to account for implementation of the Department of Labor’s fiduciary rule. While the fate of the fiduciary rule now hangs in the U.S. court system, plan sponsors retain a duty to understand and monitor their recordkeepers revised service offering. These services include but are not limited to: investment education, advice, managed accounts, general plan education, enrollment, and plan distributions. We are calling this service array – ‘Participant Services.’

Multnomah Group created a new report designed to summarize the recordkeepers definition and delivery of these services. The results of this exercise showed that while there are significant commonalities, differences in key areas exist. The table below provides a summary of the key areas.

Subject Area



Fiduciary services

  • Investment advice
  • Managed accounts
  • Participant distributions
  • Financial wellness
  • Savings rates
  • Investment advice/Managed accounts either delivered through a proprietary or non-proprietary solution

Non-fiduciary services

  • General plan education, announcements, enrollment, webinars, on-line tools, etc.
  • No substantive differences

Delivery method

  • Online, in-person, phone or print
  • No substantive differences

Education topics

  • Segmentation/targeted groups (e.g., young, mid-career, nearing retirement)
  • Financial wellness (e.g., budgeting, saving, investing, borrowing, etc.)
  • No substantive differences

Plan sponsor monitoring

  • Quarterly and/or annual reporting
  • Reports from independent auditors covering advice tools
  • Comparison of populations (advice versus non-advice participants)

Measuring success

  • Does participant services (advice and/or education) impact participant behavior
  • No substantive differences

Managing conflicts of interests

  • Employees providing advice must use ‘advice tools’ to facilitate discussions
  • No substantive differences

We note common threads of education topics, delivery methods, and monitoring through regular reporting are noted across the vendors, but we also observe differentiation in the categories of fiduciary services and plan sponsor monitoring.  

  • For example, one of the vendors offers financial wellness tools under ‘fiduciary services.’ Financial wellness, a topic deserving of its own blog post, is the common industry term for a much broader set of educational tools/materials seeking to help plan participants with their entire financial situation (e.g., budgeting, saving, investing, borrowing, debt repayment, etc.). A credible argument can be made that participants with a broad view of their financial picture are better equipped to develop a long-term plan that includes retirement savings. It will be interesting to watch the vendor community over the coming years to see if financial wellness is more broadly viewed as a ‘fiduciary service.’

  • Another area of both similarity and differentiation observed is how vendors seek to demonstrate the value of their advice programs. A common thread is that vendors will measure the programs’ success through the resulting participant behavior changes (e.g., savings rates, diversification, outstanding loans, etc.). In fact, one vendor went a step further by noting the ability later this year to provide comparison reporting of participants receiving advice versus those not utilizing the advice tools. Over time, this type of reporting should allow plan sponsors to monitor retirement readiness progress of the two groups and potentially gain a quantitative validation of the advice programs.

While the fate of the fiduciary rule is in doubt, the implementation work undertaken by the recordkeepers has been significant to modify delivery of participant services in anticipation of the rule. We will continue to work with clients and vendors to understand this evolving landscape. 

Multnomah Group is a registered investment adviser, registered with the Securities and Exchange Commission. Any information contained herein or on Multnomah Group’s website is provided for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.   Investments involve risk and, unless otherwise stated, are not guaranteed.  Multnomah Group does not provide legal or tax advice.  

Any views expressed herein are those of the author(s) and not necessarily those of Multnomah Group or Multnomah Group’s clients.

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