Ignore Generic 401(k) Guidance Posed as Advice

We have seen people follow guidance from the likes of the Jim Cramers, Suze Ormans and Dave Ramsey (though we are big fans of his debt reduction advice), which more often than not steers people into an inappropriate portfolio. Many 401(k) providers will even provide some general guidance as well, but they leave investors to figure out the ideal recipe (asset allocation) to create from their plan’s ingredients (investment options).

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BeManaged Cited in Congressional Testimony Regarding 401(k) Advice

Our friend Matthew Hutcheson, Independent Fiduciary, recently conducted testimony with the Congressional Ways and Means Committee. The goal of the testimony was to discuss the need for fiduciary best practices to continue to be reinforced with 401(k) plan sponsors as well as avoiding the potential conflicts of interest inherent to the broker dealer model.

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Thoughts on 401(k) Advice Session from fi360 National Conference (Presentation Included)

For the third straight year, I attended the fi360 National Conference, the premier fiduciary-focused conference in the nation. The sessions were outstanding, focusing on the many changes taking place within the retirement plan industry, including those proposed for 401(k) advice. I was fortunate enough to be able to speak on an esteemed panel regarding the topic to a packed house of concerned advisors and retirement plan providers. Here are some key points that were discussed:

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DoL to Issue New 401(k) Advice Rule Potentially by the Fall

The comment period for the DoL’s new 401(k) advice period ended on March 5th, and the 70 response letters will be under consideration by the Employee Benefits Security Administration. Financial-Planning.com reported that the Department could have the rule on advice finalized as soon as this fall. Though it might end up being four years since the PPA was passed before this rule is finalized, it should be worth the wait for 401(k) investors due to its conflict-free, fiduciary approach.

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BeManaged Featured in May Edition of Financial Advisor Magazine

In this month’s F-A Magazine, BeManaged was featured in the article titled “Better Laid Plans,” which is focused on how companies around the nation are answering the call for 401(k) advice. It was a privilege to be included in the article, but there is a key point we would like to correct about how we operate.

We do NOT control the investor’s contributions. The participant is ALWAYS in complete control, we simply provide encouragement and strategies for how to increase those contributions.

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401(k) Managed Accounts – Simply a Method of Delivering 401(k) Advice

401(k) managed accounts and 401(k) advice are often considered two entirely different things in the retirement plan industry. Apples and oranges? I find this odd, to put it lightly. The ’01 SunAmerica Opinion opened the door for participants to receive advice or account management on a fee for service basis. Specifically, the following is the text from the SunAmerica Opinion, which simply states both investment advice and “discretionary asset allocation” (aka account management/managed accounts) are available:

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