New Evidence on the Demand for Advice within Retirement Plans
By Jonathan Reuter & David P. Richardson.
We study demand for advice within defined contribution retirement plans offered by 23 institutions where TIAA is sole recordkeeper. Advice seeking increases with age, account balance, annual contribution level, web access, and changes in marital status. More provocatively, participants who invest solely through target date funds—the dominant default investment option—are significantly less likely to seek any form of advice throughout the age distribution, raising the possibility that reliance upon defaults crowds out advice seeking. Advice seeking increases significantly following the introduction of online tools, but is only weakly correlated with market returns and investment menu changes.
Source: SSRN
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