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Success after IF
Does anyone use a financial advisor to manage 401k?
We have no idea how to pick funds, etc. and our 401k only seem to lose money. Just wondering if it would be worth it to pay an expert to manage them for us. Do you know what the going rate is for this sort of thing? TIA
IVF #3 10/09 BFP!
12dp3dt Beta #1 = 319
14dp3dt Beta #2 = 565
21dp3dt Beta #3 = 10,475! u/s showed twins!!
IVF 12/12 BFP!
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Re: Does anyone use a financial advisor to manage 401k?
I work in an estate planning law firm and we work with financial advisors on a daily basis. My DH and I also use a financial advisor for our personal matters. I'd recommend finding one you can trust by getting a referral from a friend or other professional (i.e. attorney, banker, etc.)
Good luck!!!
We have a financial advisor that oversees all out financial assets. She makes recommendations on my 401k distribution too.
I want to say that investments for the most part over te last few years have taken a big hit, and aside of pulling all your funds into money markets, everything else has been loosing value. You're not alone in lost investments by doing it on your own.
I will say that one of the things our FA showed me is that I wasnt diversifying enough, and that several of my funds had overlapping companies that made it a bigger risk.
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I work in the industry for a 401(k) Provider, and alongside Financial Advisors who sell our product, to educate Participants like yourself on investment basics, and to help get them more engaged in their retirement planning. First off, depending on whom your provider is (their company name will be on all your statements and website), you may already have an Advisor that works with your plan, who is accessible to you for the type of help the previous poster is getting from their Financial Advisor. The types of things they can do are review your overall situation and goals, help you determine whether you're properly exposed from a risk standpoint given your age, goals & time horizon, and help you select the best investments to accomplish those goals. I would contact your plan's in-house administrator (likely an HR Director or Benefits Coordinator), and find out if there is an Advisor that works with your plan's Trustees to oversee the plan. I would also learn about the asset allocation models offered by your plan. Most plans have either a target-date based approach or a risk-based approach, where the fund is actually a collection of underlying investments that are pre-selected, and then the ongoing management is handled by professionals either at the Provider, or by a team of outside asset managers who direct the investments for their portion of that fund. These models are how *most* 401(k) participants should be investing, but from experience I can tell you that the majority of laymen, who have no clue how to select or monitor funds, seem not to know these are a way for them to give up that responsibility to a group of professionals for a competitive cost. If you have no Advisor that works with your plan to help you find the right approach given your risk characteristics, then yes - it's always a good idea to consult with a professional - just be aware of the costs. Most reputable fee-based Advisors (meaning they get paid by taking a percentage of your account's value on a consistent basis) will not take on an account with lesser assets b/c it's not productive for them or feasible for your smaller balance- so you may look instead at just paying a fee for a one-time assessment and plan, which most can do for anywhere from $500-$1500. If you have the assets to manage, then you can expect to pay anywhere from 1-2% for the assistance in a more comprehensive professional relationship with an Advisor. You have many choices - licensed professionals can be found at Broker-dealers, Bank Private Client and Trust departments, or independent firms. You are smart to be thinking about it now, as your nest egg is nothing to become a hobbyist with; I would go ahead and start investigating your options. Also, the previous poster is also correct. While some of your recent losses in your plan are likely due to being improperly diversified or allocated risk-wise, most of it is likely due to the overall market and economy's lapse. Trust - there is no one "makin' out" real well right now, regardless of how they're invested.
Good luck!