Should You Pay Someone To Manage Your Employer 401k?



Retirement Plan Money Management

As the stock market continues to reach new highs, you probably are wondering what to do with your retirement 401K plan investments. Add more to your winners, take your profits and run, or do nothing at all?  Some weary investors make the mistake of setting it and forgetting it. That is why many confused investors are turning to managed accounts in their 401(k) plans in which they pay a fee to have professional investment advisors make these decisions. This is becoming an ever increasingly popular choice.

If you feel that you are not receiving adequate investment advice from your employer’s retirement plan provider, we can manage your 401(k), TSA, TSP, Simple plan or pension plan. If your portfolio lost more than 10% in the last recession, you need to take another look at how you are managing risk.

That does not mean that managed accounts do not have value.  In fact, a new study (1) shows that those who used managed accounts earned 3.32 percentage points more on average than do-it-yourselfers net of fees. That’s probably because of the tendency of investors to chase performance, becoming aggressive when the stock market is doing well and more conservative when the market is down, which leads to buying high and selling low. Many investors also leave their money in cash, either because it was the default option when they opened their employer 401K and they never changed it or because their unfamiliarity with investing makes them too afraid to do anything else.

So, should you invest in your employer’s 401K account if you’re confused and looking for help with your retirement?  Consulting with a professional investment advisor at Research Financial Strategies to help make important decisions with your 401K not only creates less fear of the unknown but we will help guide you to a more successful retirement. Research Financial Strategies will offer ongoing management (401K advisor) of your employer 401K for a very small fee. Our years of experience will help navigate your 401K toward your goals.

(1) MarketWatch May13, 2014