Comments on: Do employees want investment advice or not? http://blogs.reuters.com/felix-salmon/2010/09/15/do-employees-want-investment-advice-or-not/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Curmudgeon http://blogs.reuters.com/felix-salmon/2010/09/15/do-employees-want-investment-advice-or-not/comment-page-1/#comment-18419 Thu, 16 Sep 2010 14:15:57 +0000 http://blogs.reuters.com/felix-salmon/?p=5369#comment-18419 Regarding your update . . . so what you’re saying is that the ideal is to be unsophisticated enough to accept free (sales) advice, but sophisticated enough to accept only the “save more money” part. (couldn’t resist)

@maynard – I discovered Andrew Tobias’s books just out of college, knowing nothing of the subject, and their information and advice have largely guided me to this day.

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By: maynardGkeynes http://blogs.reuters.com/felix-salmon/2010/09/15/do-employees-want-investment-advice-or-not/comment-page-1/#comment-18411 Thu, 16 Sep 2010 05:41:40 +0000 http://blogs.reuters.com/felix-salmon/?p=5369#comment-18411 The first words of Andrew Tobias’s classic TOIGYEN are “Trust no one.” That is the only investment advice that can ever make a difference. If you start there, you have at least a fighting chance in this world.

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By: TFF http://blogs.reuters.com/felix-salmon/2010/09/15/do-employees-want-investment-advice-or-not/comment-page-1/#comment-18403 Thu, 16 Sep 2010 00:02:54 +0000 http://blogs.reuters.com/felix-salmon/?p=5369#comment-18403 I’m wondering if the survey means anything at all, or whether it is hopelessly bogged down by confounders?

If I were a naive young employee in my 20s with a little excess cash flow, ready to start saving for retirement, then I would likely sit down with that 401k representative and get something started. In the survey I would be counted as “receiving advice” and “changing deferral rates”, but it would be a stretch to attribute the “changed deferral rate” to the advice. My readiness to begin saving initiated the process.

Having initiated a deferral plan, I might then continue that plan for MANY years without feeling the need to meet with the salesman again. So in those subsequent years I might be “not receiving advice” and “not increasing deferrals”.

As it happened, I did meet with a 403(b) “variable annuity” salesman once early on. He tried to sell me a product with annual fees approaching 2%, so I took the time to figure it out myself. As others have stated, the “free advice” is often worth less than you pay for it.

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By: jamesagain http://blogs.reuters.com/felix-salmon/2010/09/15/do-employees-want-investment-advice-or-not/comment-page-1/#comment-18402 Wed, 15 Sep 2010 22:45:29 +0000 http://blogs.reuters.com/felix-salmon/?p=5369#comment-18402 Allianz did a series of studies on retirement choice analysis. You can find it at http://www.allianzinvestors.com/Commenta ry/MarketInsights/Pages/BehavioralFinanc eandthePost-RetirementCrisis.aspx

In particular, those studies do have information about opt-in versus opt-out in 401(k) investment.

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By: wcw http://blogs.reuters.com/felix-salmon/2010/09/15/do-employees-want-investment-advice-or-not/comment-page-1/#comment-18401 Wed, 15 Sep 2010 22:13:22 +0000 http://blogs.reuters.com/felix-salmon/?p=5369#comment-18401 It is absolutely true that right now, ‘investment advice is really a sales pitch.’ That’s because right now that advice comes from Schwab or Fido, and they’re not giving it away. They need to sell to make it pay. If, however, plan sponsors hired some good CFPs to give every 401k-eligible employee an annual consultation on his schedule, that would change. Even a seminar setting would be better than nothing.

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By: david3 http://blogs.reuters.com/felix-salmon/2010/09/15/do-employees-want-investment-advice-or-not/comment-page-1/#comment-18400 Wed, 15 Sep 2010 21:59:44 +0000 http://blogs.reuters.com/felix-salmon/?p=5369#comment-18400 I am currently studying for the Level III CFA exam and just read about this topic this weekend in the behavioral finance section.

Participant education is quite interesting. It seems that even with opt-out retirement savings plans many people just stay in the default fund, which often times is a money market. So even though there is savings effect it would be hard to call it much of a retirement savings plan if it sits in a money market.

The EBRI 2003 “Retirement Confidence Survey Summary of Findings” found that nearly half of U.S. workers with an employment related plan have beeen provided with educational material or seminars about retirement planning and saving.

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By: Curmudgeon http://blogs.reuters.com/felix-salmon/2010/09/15/do-employees-want-investment-advice-or-not/comment-page-1/#comment-18399 Wed, 15 Sep 2010 21:42:29 +0000 http://blogs.reuters.com/felix-salmon/?p=5369#comment-18399 I have a fair amount of money from past jobs in Fidelity 401Ks. I’ve always thought that promotions for their advice were too sales-oriented. Coincidentally, they are doing an open house for a new investment center next week less than a mile from my house. I actually wanted to attend, but am on business travel.

So my take is that the investment advice is really a sales pitch, and even when they invite me to something in person, it’s inconvenient.

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