Producers know deep in their gut that there's a hunger for financial advice across corporate America. The fact is that most employees don't have the time, expertise or desire to manage their investment portfolios. And the past year has served as a painful reminder of this fact, with scores of plan participants afraid to even open their 401(k) quarterly statements.

But these services have failed to gain enough market traction, despite regulatory guidance from Section 404(c) of ERISA and well-intentioned provisions in the Pension Protection Act to further shield fiduciaries from litigation traced to poor investment advice.

Key drivers of the growing demand for financial planning in the workplace include the difficult economic environment coupled with an emphasis on transparency in the new Schedule 5500-C form for qualified plans and the Obama administration's 2011 budget, according to Dave Evans, senior vice president of the Independent Insurance Agents & Brokers of America in Washington, D.C., known as the "Big I."

But the trend toward full disclosure hasn't quite translated on the compliance side. For example, he notes that PPA was expected to provide safe harbors for financial advisers and add clarity to the issue of potential conflicts of interest for those associated with insurance companies or investment firms. Evans says the Obama administration quickly rescinded finalized PPA provisions that were set to take effect this year, believing "there was still not enough of a firewall" to protect plan participants from receiving biased advice.

There also are market forces at work that help explain why this area hasn't caught fire. Many financial planners typically have avoided workplace consultations because of limitations associated with the plan size and number of investment options, explains Dirk Pantone, vice president of business development at the College for Financial Planning in Greenwood Village, Colo.

What's lacking in the institutional market, he says, are ways to turbo-charge the advice by, for instance, adding hedge protection or finding a way to buy commodities. Pantone also frets that many of the calculators and software packages made available to plan participants are inadequate when it comes to addressing complex issues associated with retirement planning and don't factor in how switching jobs will affect one's portfolio.

Huge opportunity?

But that doesn't necessarily mean there are bleak prospects for benefit brokers and advisers who are eager for a piece of the financial planning pie.

Christopher Rand, CFP, a Financial Planning Association Board member who works in MetLife's financial planning division in San Diego, Calif., sees a greater need for access to financial advice and professional guidance in light of the economic turmoil that began in 2008 and the current slow road to recovery.

From a broker standpoint, Rand notes that there is a huge opportunity to offer employer clients access to retirement education, advice and tools that can complement the overall employee benefits suite as individuals are expected to shoulder more responsibility to create their own retirement income stream.

Most of the workplace-based educational opportunities are in call centers similar to Charles Schwab or Fidelity, where trained advisers dispense basic advice about tolerance for risk and retirement timelines, according to Pantone. But he hasn't seen much growth in this area because "there is such a small margin that these funds operate on to make any profit or you would have to start charging at some point for that kind of advice."

Another problem is that most advisers in this area lack the credentials and investment knowledge needed to make prudent recommendations, cautions Somnath Basu, Ph.D., program director of the California Institute of Finance in the School of Business at California Lutheran University in Thousand Oaks, Calif., where he's also a professor of finance.

He says the certified financial planner designation does not guarantee results, noting his belief that many of the nearly one million individuals who call themselves financial planners are unqualified. A better credential, he believes, is chartered financial analyst, which Basu explains many professionals avoid because it entails a more expensive education.

"I think the way around it is for employers to go with some kind of accrediting system for planners," he suggests. (See related article on page 60.)

The College for Financial Planning offers a charter retirement plans counselor and charter retirement plans specialist designation for the employer market, which Pantone says an annual survey suggests translates into 14% to 28% higher earnings for advisers with these credentials.

Still, these specialists will need to manage a perception gap with regard to what sort of services employees expect for their money. "People want advice and they want it quickly," Pantone says. "Sometimes they don't want to pay for it, and it gets very expensive to provide one-on-one financial planning for employees, some of whom may have only been in the plan four or five years with less than $100,000."

Bruce Shutan, a contributor to Employee Benefit Adviser, is a freelance writer based in Los Angeles.

Despite the fact that three out of four Gen Y workers (those between 22 and 33 years old) feel secure in their jobs, more than 70% are very concerned about their finances and have set the goal of daily money management and budgeting, according to a study by Fidelity Investments.

Many of the young workers surveyed say the economic crisis has made their generation more conservative, which is reflected in not only their financial decisions, but also their employment choices. More Gen Y'ers today show a reluctance to job-hop, with 25% indicating an intent to stay with their current employer until retirement - up from 14% when the same survey was conducted two years ago.

Benefits have taken on more importance, too. Almost two-thirds of respondents (62%) say that the quality of benefits packages influences their choice of employer, and about the same number (64%) say that benefits affect their job loyalty. And surprisingly, about four out of 10 (44%) believe that the value of the benefits they receive should be tied to their performance.

Retirement becoming a priority

When asked about "must-have" benefits, Gen Y-ers ranked health insurance first (82%), followed by paid vacation (68%) and access to a retirement plan (57%). About 18% now consider saving for retirement their most important goal, up from 13% in 2008. The majority (57%) believe that employer-sponsored retirement plans are the best way to save for retirement.

"Many Gen Y-ers have become engaged with their finances through this economic downturn and are now recognizing how critical it is to save early for retirement," according to Phillippe Mauldin, Fidelity's executive vice president of workplace investing. "However, this is the life stage when retirement is competing with an ever-growing list of financial priorities."

One of the toughest of those decisions: deciding whether to cash out or roll over their retirement plan accounts in the event of a job loss. Fidelity's study found that guidance provided during this time plays a crucial role in that decision: Job changers who had funds in an employer-sponsored retirement plan and sought guidance cashed out 29% of the time, versus 49% among those who did not receive any guidance.

Overall, 35% of Gen Y job changers with funds in a retirement plan cashed out their balances the last time they left a job. The most common reasons for doing so were: a small balance not perceived to be worth rolling over (30%); job loss tied to a greater need for the money (24%); the money was needed for a major purchase (20%); and the money was needed for everyday expenses (19%).

The Fidelity study, conducted in August 2009, polled 1,017 employed individuals between 22 and 33 years old.