Financial Engines, which provides advice to participants of 445 mostly large plans, says that about a half-million plan participants with almost $44 billion in assets use its managed accounts, often those nearing retirement. Morningstar's Investment Management division, which offers advice to about 150,000 plans, many of them small, manages the accounts of about 746,000 people with about $19 billion in assets.
The service is most effective when it is truly customized. To get that, participants are asked to provide data about their investments outside the plan, such as other savings, old 401k plans or IRAs, and a spouse's earnings and retirement accounts. The problem is, most people don't provide all of that detail. And without it, "you're not going to get what you pay for," says Walton.
If you want to manage your own account, you still may have the option of sitting down with an adviser or talking with someone on the phone who will consider your individual situation and help you create a plan. It will be up to you, however, to actually make the changes to your account and monitor it in the future.
TIAA-CREF, which provides plans to 15,000 institutions with 3.7 million participants, offers such counseling at no charge. It has 400 people based in local offices, an additional 200 who visit institutions where it offers plans and about 100 phone reps to provide such guidance.
People who take advantage of that one-on-one help are more likely to make positive changes in their savings or portfolios. Still, says James Nichols, who oversees TIAA-CREF's advice and planning, "one of the challenges is getting people to stay on track," especially as they age and their situations change.
The widely available and free do-it-yourself service, where you plug your information into an online program offered by your plan and get recommendations back, is also the least used, according to a recent study (.pdf file) by Financial Engines and Aon Hewitt, which looked at how participants in eight plans fared between 2006 and 2010. More than twice as many participants in the plans used managed accounts as used online services.
The investors most likely to go online and put in the effort to get recommendations typically had higher earnings, saved a higher percentage of their pay and had larger balances than those who used managed accounts. They also tended to be a bit younger than the managed-account users.
The general lack of interest in taking advantage of easily accessible online services underscores how hard it is to get participants to think about and put some effort into their 401k investments.
"A large portion of participants are reluctant investors," says Christopher Jones, the chief investment officer at Financial Engines. Retirement investing "is down on the priority list -- people don't have the time for it, or the inclination."
VIDEO ON MSN MONEY
This is a win-win situation for wall street bankers.
Have all the incompetent and thieving banks and any and all other businesses go bankrupt. New competent and trustworthy ones will emerge and replace them. THEY ALWAYS DO! Simple business and economics 101! For every failure, there's a success to take it's place.
Throw all rich criminals in jail or out of the country and shut down and ban Fraud Street forever. WE WILL BE MUCH BETTER OFF AND MORE SUCCESSFUL AS A COUNTRY IN THE LONG RUN!
Money is no object when it comes to creating a rich and successful country! READ MY LIPS..... There is no such thing as INFLATION or DEFLATION when speaking of monetary policy. You can keep printing all the money to your heart's content and always keep it at the SAME value. INFLATION AND DEFLATION ARE CREATED AND CAUSED BY HUMAN MANIPULATION! You can even print a NEW currency to replace the old currency, rendering that old currency worthless. Again, INFLATION or DEFLATION don't matter! DEFICITS AND BORROWING FROM OTHER COUNTRIES DOES MATTER! Simple economics 101!
This country is doomed unless I or someone like me becomes President to save this backward and upside down society of ignorant fools.
A well-known Washington lobbying firm with links to the financial industry has proposed an $850,000 plan to take on Occupy Wall Street and politicians who might express sympathy for the protests, according to a memo obtained by the MSNBC program “Up w/ Chris Hayes.”
The proposal was written on the letterhead of the lobbying firm Clark Lytle Geduldig & Cranford and addressed to one of CLGC’s clients, the American Bankers Association.
CLGC’s memo proposes that the ABA pay CLGC $850,000 to conduct “opposition research” on Occupy Wall Street in order to construct “negative narratives” about the protests and allied politicians. The memo also asserts that Democratic victories in 2012 would be detrimental for Wall Street and targets specific races in which it says Wall Street would benefit by electing Republicans instead.
According to the memo, if Democrats embrace OWS, “This would mean more than just short-term political discomfort for Wall Street. … It has the potential to have very long-lasting political, policy and financial impacts on the companies in the center of the bullseye.”
The memo also suggests that Democratic victories in 2012 should not be the ABA’s biggest concern. “… (T)he bigger concern,” the memo says, “should be that Republicans will no longer defend Wall Street companies.”
Two of the memo’s authors, partners Sam Geduldig and Jay Cranford, previously worked for House Speaker John Boehner, R-Ohio. Geduldig joined CLGC before Boehner became speaker; Cranford joined CLGC this year after serving as the speaker’s assistant for policy. A third partner, Steve Clark, is reportedly “tight” with Boehner, according to a story by Roll Call that CLGC features on its website.
Jeff Sigmund, an ABA spokesperson, confirmed that the association got the memo. “Our Government Relations staff did receive the proposal – it was unsolicited and we chose not to act on it in any way,” he said in a statement to "Up."
CLGC did not return calls seeking comment.
Remember the Leman and Brothers bankrupt, Murdock fraud this will give you the clue educate yourself your invested money is buying their CEO a Manson and fancy cars.
leela that has been posted so many times. Work for the banks or Wall St.?
1) If you can't manage your own money you can expect to reduce it by fees charged by someone who is guessing like yourself.
2) Interest rates are keep low to help our economy according to news reports. To make our Banks stronger the government set interest rates low yet banks still charge high loan rates. In th past the stock holders paid for mismanagement but now it's the customers.
3) With #2 said, do you really want the people who created this economic mess to give you advise.
If I am really serving as a fiduciary I would first make sure the client has decent cash reserves, and has eliminated short term debt. Those are higher priorities than contributing to a 401(k).
If an "advisor" is only focusing on asset accumulation, while deliberately ignoring the liability side of the ledger, the client is not receiving advice. He or she is just getting another sales job from someone who is pretending to help them. This has always been a huge problem with the financial services industry.
The 401(k) administrator should also provide a disclaimer that tells participants that they are virtually guaranteed to pay higher taxes in the future on those dollars being diverted into the 401(k).
I have always been a good saver. I learned to save at an early age. I had a part time job when I was fifteen and when I turned sixteen I had my own checking account with the help of my parents. I learned very early how to budget my finances; but is was not until I was in my thirties that I learned how to invest my money. My parents grew up in the depression and my father was very against investing in the stock market. I always respected my parents, so for a very long time I only put my money in bank accounts, savings bonds, and CD’s. When I was in my thirties I started looking at other alternatives. I finally took the plunge, and upon the recommendation of a co-worker I bought my first shares of stock. I wound up loses my shirt on that investment but I was not turned off on the stock market. I stared doing my own research and began investing in the market. I found out I was pretty good at stock picking.
I am basically a value investor. I buy good companies and for the most part I reinvest the dividends. I am a believer of dollar cost averaging and like Warren Buffet I invest in the company; not the stock. My only regret is that I did not start earlier investing in the stock market. I have investments with my 401K plans at two companies I have worked for. At both companies you are only given a choice of mutual funds to invest in and the only stock you can hold is in the company I worked for. I make sure I was diversified in the mutual funds I have in those plans and I always try to look for the low cost funds. Both of the companies I worked for also contributed some dollar matching to the funds I put in. I feel strongly that you should take advantage of contributing to a 401K plan if you can diversify your investments and your company matches some or all of your contributions.
I also feel strongly that you should do your homework and monitor what you are investing in. When I first started investing in the market we did not have personal computers, the Internet, or a lot of financial programs on television to research the companies you wanted to invest in. It is a lot easier today to get information and make wise investment choices. Even though I go to the company seminars for our 401K plan and listen to the plans advisors, I still do all my own research. It is your money and you have a personal interest to your own success. My advice to anyone that is thinking about investing in the stock market or a 401K plan is do your own research, investing earlier in life is better than investing later, be diversified, take advantage of dollar matching plans, and try to reinvest the dividends in the companies you buy.
After my first layoff in 2001 I transferred all my 401K to a Self Directed IRA with the exception of $80K which I allowed an "expert" to manage at A.G Edwards (now Wells Fargo). I had regular consultations with him where I explained my risk theory but for the most part I allowed him to diversify as he felt necessary. In 2 years he managed to loose 30% including the contributions I was making and when I finally got tired of the losses it took another 3 days to stop the bleeding. During that period of time his fees were never clearly delineated on any report and even though my funds were tanking, he still collected his fees. Most of these financial advisors are idiots using an antiquated set of guidelines that haven't changed for the last 50 years and that are no longer applicable in the current market. I took what was left and did some strategic short term trades on Scot trade and managed to recover the losses in a mater of 3 month. My advise is: do you own homework and manage your own money. No one cares more about your money than you do and financial advisors haven't got a clue. Also, you must be able to liquidate on a minutes notice and that will not work when you have to go through a broker. When the market tanks they will cover their a$$ with your money before they liquidate so their landing is softer. It is nothing but a racket.
I remember 60 Minutes, or a show like it, did a piece on a monkey throwing darts to pick stocks that out performed the stocks picked by some stock market guru?
410Ks are great if your company will match part of your contributons. If so, only contribute enough to get the full match. If not, then skip the 401K and open a ROTH. You won't pay any tax on any captial gains. The ROTH is a post tax contributon, but the savings comes in when you pay no taxes on the capital gains which couod be huge if you contribute yearly and invest conservartiley.
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