Think back to your last major decision. Maybe it was a career move, a relocation, a medical treatment, or something to do with love.
Did you make a quick choice without exploring your options? Or did you conduct research and gather as much information as possible?
Some people are very comfortable making important decisions on their own. While others look to trusted medical, legal, career, and financial professionals who have their best interest in mind.
Now is a great time to figure out once-and-for-all what kind of company 401(k) retirement plan account decision maker you are.
Here are three reasons to get a second opinion on the company 401(k) retirement plan mutual funds you own right now.
1. Put a stock market risk management strategy in place
The U.S. stock market have risen steadily for the last 10-plus years. World-wide interest rates are at record low levels. You literally could own any company 401(k) mutual fund option over the last decade and “made money.”
That fact makes the next major stock market and interest rate move all the more dangerous to your company 401(k) retirement plan account. How is the next great stock market or interest rate move going to affect your current all-time high company 401(k) retirement plan account balance?
An independent, third-party, fiduciary level investment advisor will give you confidence that your current company 401(k) retirement plan mutual funds are appropriate for your appropriate risk level.
There are a couple of company 401(k) mutual funds that you own that have lagged the major U.S. stock market indices over the last few years. You are taking all the necessary stock market risk and not being rewarded with the best possible investment returns.
You don’t have to be a stock and bond market expert to understand how that situation is not in your best interest. A third-party investment management professional can let you know if you are suffering from the same condition.
2. Eliminate doubt once-and-for-all
Company 401(k) retirement plan sponsors (your company) rely on company 401(k) retirement plan providers (Schwab, Fidelity, Vanguard, etc.) to provide your 401(k) mutual fund options.
Does the phrase, “The fox guarding the hen house” have any meaning to you?
Your company has put your company 401(k) retirement plan provider in charge of your mutual fund options. These providers promote their family of mutual funds over other mutual fund options. For this reason alone, you should seek out an unbiased opinion of the mutual funds on your default company 401(k) retirement plan menu.
There are many independent, third-party, unbiased mutual fund ranking databases available to individual investors. If you don’t have access to one, you most likely have never asked a financial professional.
There is no mutual fund database that “has all the answers.” But, an investment advisor with individual company 401(k) retirement plan investment advice experience has access to more information than you have ever seen.
Do you ever play fantasy football? Or fill out a men’s NCAA tournament bracket? If so, then shame on you. You have spent more time with either activity than you have picking your best company 401(k) mutual fund options.
3. Two Heads are Better Than One
Using the “two heads are better than one” approach, more information is always better than less. Another logical, disciplined, and organized set of eyes can be invaluable.
No one can manage your company 401(k) retirement plan account for you. But the right investment advice professional can certainly improve your investment management decisions both now and going forward.
At a minimum, an investment advisor can lower your any company 401(k) retirement plan mutual fund annual expenses and improve your investment returns. Even better, with a stock market risk management plan in place now, you will surely preserve the largest part of the last 10+ years of stock and bond market investment gains.
Stocks are near all-time highs and interest rates are near all-time lows. Honestly, what direction do you think the next big move in your company 401(k) retirement plan account will be?
I have provided investment advice to individual company 401(k) retirement plan participants for the last 21 years. I have never had an individual company 401(k) retirement plan participant say to me that lower annual mutual fund expenses and improved investment performance was not worth my annual investment advisory fee.
Ric Lager
Lager & Company, Inc.
