Better 401(k) plans

We have just returned from Schwab IMPACT 2013 Conference where we had an opportunity to meet our counterparts thought the country and listen to some world-famous speakers.

One of the topics was retirement plans and specifically 401(k) plans which are the primary way most people in private industry are putting money away for their retirement.

Charles Schwab Chief Executive Officer Walter Bettinger on Monday called for a transformation of the 401(k) industry by slashing fees and providing participants with objective and customized advice autonomous from the plan’s consultants.

“It’s finally time to put the interests of the average hard working American first,” Bettinger said in a speech at the National Press Club in Washington, D.C.

This ia an initiative which we heartily endorse.  While we leave it to plan sponsors and mutual fund suppliers to lower fees on their funds, we are doing our part.  First we have created a program that provides workers with guidance on how much each fund charges in fees, and how to construct a portfolio inside each 401(k) that meets their specific objectives.

Bettinger said the two-pronged plan would mean more jobs for investment advisors because of the greater demand for more time consuming, individualized financial plans.

Looking at target-date funds, he said they should go away because they allocate investments only on a single factor—age.

“They are better than nothing but not as good as customized advice,” he said.

For guidance on your 401(k) plan, call us at 757-638-5490 or 877-322-5490, or visit our website.

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