Posts Tagged ‘401k advice’

Survey Reveals 89% of 401k Investors Want Asset Allocation Help

A survey conducted by the Boston Consulting Group found that investors find retirement planning is confusing and 89% want help creating their ‘investment recipe’ (aka asset allocation). Here are the other findings of the 2,600 investors surveyed:

84% want help calculating and/or creating retirement income
79% would like an annual review “to set and measure their progress”
48% feel they are “in consult of their retirement plan investments”

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fi360 Webinar Recording: The Combined Effects of the DOL’s Proposed Advice Regulation and 408(b)(2)

CEFEX and fi360 sponsored attorney Fred Reish to provide a thorough overview of the proposed advice and 408(b)(2) regulations. If you are a plan fiduciary who has hired a person or firm to provide your employees advice on their 401k, or an advisor/broker that works with 401k participants, this is essentially a must-listen event. The following were a number of interesting points which affect plan sponsors and advisors:

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Survey Demonstrates Better Results for 401k Participants Using Advice

A recent study illustrated finds that 401k participants using advice are better diversified and have larger balances. Here are some interesting findings of the survey:

Improved Diversification – Participants held 74% more funds in their portfolio (8.67 versus 4.98 funds)
Improved Performance – 3 Year Annualized Return was 2.67% better than do-it-yourself investors
Larger Balances Seek Advice – Average balance of participants using advice was $107,558 versus $44,178 of do-it-yourself investors
These results are very similar to our experience with 401k investors. We find that participants using advice (or managed accounts) are better diversified and experience better downside protection due to improved risk management. Additionally, the larger the balance, the more likely the participant is to seek advice.

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Final Regulation on 401(k) Advice Bill Due Early 2011

Even though it has been in the works for over four years now, it looks like we might finally receive clarification on the PPA ‘Fiduciary Adviser’ 401(k) advice regulations early next year. Understandably, with the many issues that have garnered more press such as the healthcare debate, 401(k) fee disclosure and target date funds, the regulations have been delayed.

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(Podcast) 401(k) Participant Advice Best Practices on Talk 401(k) with Don Davidson

I was fortunate enough to be interviewed by Don Davidson of Manarin Investment Counsel for his Talk 401(k) podcast. While Don does an excellent job with this, I cannot say the same for myself. Therefore, if you are willing to overlook my stammerings (I was surprisingly nervous), the information might be helpful to you. Some of the topics included in the conversation include:

What is the difference between advice and guidance?
What is the liability for employers to provide advice to their participants?
The PPA Level Fee requirement
Why advice needs to be ongoing
Advice v. managed accounts
Technology and its impact on participant engagement

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401(k) Investing, Diversification and Asset Allocation – In Plain English

The BeManaged Ingredients and Recipe Investment Analogy

Over the past number of years I have come to really enjoy cooking. It unknowingly led me to an analogy for investing that is simple to understand and better yet, visual. The analogy, consisting of ingredients and the underlying recipe, has helped hundreds of investors better understand what they can ‘control’ within their 401(k). Furthermore it helps investors understand confusing terms such as “diversification” and “asset allocation” and how they impact the ‘behavior’ of their portfolio.

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A Conversation on 401(k) Advice vs. Guidance – PPA Fiduciary Adviser v. The DoL 96-1 Opinion

When marketing our services to companies sponsoring 401(k) plans, we will often face confusion as to what is truly being offered to participants, guidance or advice. The reason being that the word advice has been used liberally by brokers, advisors, and service providers. Unfortunately, that will sometimes lead to companies assuming their participants are receiving the advice they need, rather than knowing what is actually taking place in those education meetings and any 1on1 interactions that follow. The guidance versus advice being so unclear, that the following is a mock conversation designed to educate plan sponsors and advisors as to what is and isn’t, should and shouldn’t, be taking place with participants so to protect the plan sponsor from fiduciary liability:

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4 Ways the New 408(b)2 Disclosure Regulations Will Benefit Plan Sponsors

The new 408(b)2 disclosure regs have been long awaited, and present a great opportunity for companies to better understand and benchmark the fees associated with their 401(k) provider. Additionally, it will be require 401(k) service providers to better articulate value in light of the fees they charge. ERISA requires plan fiduciaries to review the fee structure of, and I paraphrase, “reasonable fees for reasonable service.”

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