Public sector workers favor family over advisers, MissionSquare finds

Public sector workers are substantially less likely than private sector employees to seek professional financial advice, and the new MissionSquare data suggests the gap is less about access than trust. The study, first reported by PLANADVISER, found that among defined benefit plan participants, 46% of public sector workers had worked with a financial professional, compared with 70% in the private sector. Its authors — Zhikun Liu, head of the MissionSquare Institute, David Blanchett, head of retirement research at Prudential Financial, and Gerald Young, a senior researcher at the institute — segmented participants by sector and by whether they held a defined benefit plan, a defined contribution plan, or both.

The trust breakdown is the part plan sponsors should read twice. Among DC plan participants, public sector workers were 10.9 percentage points more likely than private sector workers to rely on family and friends for financial advice, and 8.9 percentage points less likely to trust a financial adviser or planner. Enrollment behavior tells a similar story: 31% of private sector workers with only a DC plan chose their own investments, compared with 23% of their public sector counterparts, and among those holding both DC and DB plans the shares were 41% and 34%.

Liu told PLANADVISER that many public sector workers also report lower confidence in investment and retirement-planning decisions, adding, 'The implication for advisers is that success may require not only providing information, but also building confidence and helping participants navigate complex financial decisions throughout their careers.'

MissionSquare's numbers suggest the default guidance playbook is aimed at the wrong problem, treating participant guidance as an information problem to be solved with a better portal, a sharper webinar, and the diversification explanation delivered once more. For a large share of public sector workers, credibility comes before comprehension, which calls for the remedies Liu lists — one-on-one consultations, retirement-readiness programs, and guidance embedded into key participant touchpoints — and likely also for peer-to-peer formats and referral pathways that treat family and friends as a channel to reach participants, not a rival to be overridden.

The confidence gap has appeared in another corner of retirement research recently, as this publication noted in reporting that 62% of child-free adults have no written financial plan. For public sector advisers, the MissionSquare data sharpens the lesson that winning this participant means becoming the trusted voice in the room, built into the moments where decisions actually happen.