A challenge I face providing 401(k) advice might be a surprise.
I know the best mutual funds to own in your company 401(k) menu. The best mutual funds stand out on any default 401(k) menu.
The biggest challenge I face is getting my 401(k) advice clients to sell their worst mutual funds. And buy the mutual funds that I recommend.
I am not alone. My doctor, lawyer, CPA, and consultant clients all complain about the same thing. The “what to do” for their clients is easy for them. The hard part about a client relationship is getting them to do what they tell them.
I spend more time managing 401(k) investment advice behavior. Identifying the best 401(k) mutual funds to won is the easy part.
I outline my client 401(k) investment advice. During the next client contact, I find out they have not done any of the 401(k) investment moves I advised them to do.
They did not have time. They 401(k) provider web site was too intimidating, No one answered the 800 number on the second ring.
I should have majored in psychology in college. I have learned the hard way the importance of human behavior in the investment advice space.
Avoidance behavior and procrastination are the biggest problems.
I can diagnose with expert precision the best mutual funds to own on any default company 401(k) menu. Turns out I do not need to be an expert in figure out which 401(k) mutual funds to own.
It is more useful for me to listen. To empathize and sympathize with my 401(k) advice clients. To agree with the never-ending intimidating, confusing, and time-consuming 401(k) management decisions.
My diagnosis of a default 401(k) mutual fund menu is much less important to my 401(k) advice client. The perfect 401(k) mutual fund allocation makes no difference to the client who does not follow it.
Turns out picking 401(k) mutual funds is not that hard. Getting my individual 401(k) advice client to do it requires moving mountains. Big emotional mountains. More than once.
Solutions to “what to buy” on any company 401(k) menu are simple. Getting clients to follow the simple advice can be a full-time job. For several years.
Do you struggle with 401(k) investment management decisions? If so, reach out to me via e-mail. Or leave a message in the comments below.
A perfect stranger like me can help. You will not hurt my feelings when you do not follow my advice. And I will not even know if you do.
Ric Lager
Lager & Company, Inc.
