401k Advisors for Down Markets
With the recent stock market volatility, retirement plan fiduciaries are wondering what they should be doing, or if they have done enough, to help participants cope with down markets.
It is more widespread than you think for some people to experience disappointment with 401k Advisors and locating high quality information. It is easy to feel like you want to give up when you cannot quite seem to come across vital information. There are many individuals who publish fantastic content online, but they are not known, and that makes it very hard with trusting them. We have been in that exact spot very many times and concerning many things. The balance of this article will examine this important topic in more detail.
Following are three governance items for you, as a fiduciary, to follow in times of market turmoil. 401k advisors work with retirement plan fiduciaries to manage through both good and bad times.
1. Analyze Retirement Plan Investments Thoroughly
As a Fiduciary, one of your most important duties is to make sure that you adhere to a documented investment process.
Your plan should have an Investment Policy Statement, which describes the selection and monitoring process for your retirement plan assets.
Decisions regarding 401(k) investments must be consistent with other timeframes. In other words, the plan will not replace investment options just because it is a down market, but rather because those investments no longer adhere to the criteria set out in the Investment Policy Statement.
2. Help Participants Understand Plan Fees
Your 401(k) advisor and service provider communicates plan fees on at least an annual basis and whenever fund changes are implemented. Litigation, whether successful or not, has often originated around fees, so disclosing them whenever possible should be a priority.
A best practice for fiduciaries is to go beyond fee disclosure by helping participants understand how plan expenses affect their retirement readiness. At a minimum, you should be asking yourself:
Have you distributed your fee disclosure?
Do you post plan documents and plan fees on your intranet site?
Do you invite participants to ask questions if they don't understand plan expenses?
3.Educate Your Employees About Retirement Savings
Employees need to be reminded they should be investing in appropriate investments for their time frame and risk tolerance. It’s important to explain how their contributions work for them during these challenging times when the markets are down.
Consistent savings during down markets often helps long-term investment returns. Many employers may be uncomfortable about providing retirement education themselves, so look at resources available from your 401k advisor, service provider or consider hiring an outside retirement plan consultant.
It was our primary goal to give you a short introduction to 401k Advisors, and allow you to see directly what can be achieved. There is related information in addition to more in-depth understanding on this important subject. In a moment, we will talk about this much deeper kind of knowledge that we feel greatly builds upon the above. One thing to remember is you have to view it against your unique needs, and that is why we offer it.