Fifty-seven per cent of defined contribution plan sponsors and 61 per cent of group RRSP sponsors offer employees access to financial advice services, according to the 2016 Capital Accumulation Plan (CAP) Benchmark Report sponsored by Great-West Life.
“Canadians who work with an advisor have household assets over four times higher than those who don’t,” says Christine Van Staden, Vice-President, National Accounts, Group Retirement Distribution for Great-West Life. “I see a significant opportunity to improve the financial wellness of Canadians by offering advice in group retirement plans.”
Smaller sponsors offered more advice services
The report, which was released this week, found smaller sponsors (fewer than 499 employees) offered more financial advice services (63 per cent) than larger sponsors (52 per cent).
The CAP report also says 58 per cent of sponsors offering a defined contribution (DC) plan and 43 per cent offering group RRSPs hold seminars for members nearing retirement. Twenty-seven per cent of sponsors offering DCs and 22 per cent offering group RRSPs offer individualized advice to members as they near retirement.
High participation rates for DC plans
Although DCs have a 90 per cent participation rate, this number is only at 60 per cent for group RRSPs and 63 per cent for deferred profit sharing plans, says the report.
Target date funds are increasingly becoming a default investment option. These funds are included in 50 per cent of DC plans, from 43 per cent in 2015. They are included in 51 per cent of group RRSPs, compared to 43 per cent in 2015.