Should You Pay Someone To Manage Your Employer 401k?



Retirement Plan Money Management

With the uncertainty of stock market fluctuations and the lingering question of when the next bear (down) market may occur, 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?  The gravity of making a potentially bad choice can be daunting to most investors.  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 401K plans in which they pay a fee to have independent professional investment advisors help 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.  Research Financial Strategies can help. We will provide an unbiased review of your 401K and offer advice based on the best potential investment choices available in your plan.

In fact, managed accounts have been proven to offer more value to 401K investors. A new study¹ 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. In fact, the Target Date Retirement mutual funds which have become a staple on most employer sponsored 401K plans were inspired as a default placement for new enrollees. Target Date Funds not only give investors an easy, no research choice but also help reduce the liability claims towards the plan sponsors when they used to use cash as the default choice. But Target Date retirement funds aren’t usually your best choice for maximizing your retirement investment account returns.
Read more: The Drawbacks Of Target Date Mutual Funds



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.  Our years of experience will help navigate your 401K toward your goals.


¹ MarketWatch May,13, 2014 – “Your 401K Plan’s Secret Weapon