Most 401(k) participants are planning for retirement without the help of an advisor. There is an opportunity for recordkeepers to step in and play a larger role in guiding participant decision making, particularly for unadvised participants, according to The Cerulli Report—U.S. Retirement End-Investor 2025.

Cerulli finds that the majority (63%) of active 401(k) participants, many of whom fall into the mass-affluent category, do not have a financial advisor. Many of these participants would like to hire an advisor in the future. Meanwhile, 52% of mass-affluent active 401(k) participants who do not work with an advisor say their retirement savings account provider is their primary source of retirement planning and financial advice.

“There is an opportunity for recordkeepers to establish themselves as a trusted advisor throughout the accumulation phase in order to retain and win assets,” says Elizabeth Chiffer, research analyst. “Recordkeepers should guide participants to help them determine their optimal retirement savings goal, target retirement date, or overall vision for their life in retirement. Developing personalized prompts for participants to reassess their goal, track progress on their goal, and update their information, at least annually, drives engagement and provides a basis of conversation with the participant. Additionally, they can also take lessons from employee benefit enrollment to guide participants toward active decision-making on an annual basis.”

401(k) participants often find retirement planning confusing and challenging. For instance, fewer than 30% of active 401(k) participants are very confident in their ability to make future decisions about decumulation and the tax implications of distributions without the help of an advisor. Participants look for advice so that they can share the responsibility for their retirement readiness and financial planning with a professional who can guide them through the planning process and assist with difficult decisions.

Cerulli recognizes that offering advice to participants presents notable challenges for recordkeepers. While that may be the ideal, there are novel solutions with less burdensome investment that recordkeepers, advisors, and plan sponsors should consider, including: repositioning the 401(k) as a means to access financial planning, engaging with participants when they are considering their other benefits, and helping participants document their retirement plan. “This framing and the inclusion of in-plan advice solutions could help maximize participants’ use of the financial benefits offered to them and help providers retain assets and win future rollovers,” concludes Chiffer.