The average account balance ofretirement savers who report using an advisor was $449,552, almosttwice as much as the $234,643 average of non-advised accounts.(Photo: Shutterstock)

There's no shortage of messaging from the retirement industryselling the value proposition of working with a financial advisor.

But does the rank-and-file 401(k) participant really needinvestment direction outside her employer's plan platform?

Maybe, maybe not. But a look at how savers who utilize self-directed brokerage accounts fare whenworking with an investment professional may provide fodder foradvisors' value proposition.

Charles Schwab's third quarter SDBA Indicator report examines the investment behaviors ofadvised and non-advised participants that invest through planbrokerage windows.

Of the 137,000 accounts reviewed in the report, only 19 percentof savers report working with an advisor.

When they do, they are wealthier and tend to spread risk moresensibly.

The average account balance of retirement savers who reportusing an advisor was $449,552, almost twice as much as the $234,643average of non-advised accounts.

Are those advisors responsible for creating all of that extrawealth? Larry Bohrer, vice president of corporate brokerageretirement services at Schwab, draws an unambiguous conclusion fromthe data.

“The report highlights the benefits of working with an advisor,”Bohrer said in a statement. “In general, participants who hadprofessional help were more diversified across all of theirholdings. In addition, advisors typically rebalance a portfoliomore often and keep their clients invested.”

Advised accounts averaged 9.5 total trades, compared to 5.5 innon-advised accounts. Advised accounts also held lowerconcentrations of individual securities. Apple, the most popularequity holding for all brokerage window participants accounting fornearly 10 percent of holdings, was aggregated less aggressively byadvised participants, who held 5.8 percent of their equity assetsin the single stock, compared to 11 percent for non-advisedinvestors.

Non-advised participants held four times as much cash, at 16.5percent, in a quarter that saw the S&P 500 Index gain 7percent. Advised accounts held an average of 4 percent cash.

Payroll contributions to plan brokerage accounts are typicallydisbursed in cash. That non-advised accounts hold considerablyhigher cash positions is best explained by the focus an advisor canbring to a participant's account, according to a statement from thefirm.

But perhaps the greatest distinction is in the way advisedaccounts use mutual funds to spread risk. Mutual funds accountedfor the largest portfolio allocation, at 50 percent, whereasnon-advised accounts allocated only 32 percent of holding to mutualfunds. For those going it alone, the largest allocation was toindividual equities, at 35 percent.

When advised investors do buy individual stocks, the topholdings show greater allocation across the economy's sectors.Apple, Amazon, and Berkshire Hathaway were the top three holdingsin both advised and non-advised accounts, and so-called “FANG”stocks—Facebook, Apple, Netflix, and Google—are favorites acrossthe board.

But advised investors also held Visa, JP Morgan, Johnson andJohnson, Chevron, and Cisco within the top 10 individual stockholdings.

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