1. It's too expensive.
Hear this—your plan costs you and your participants way too much. Your advisor might tell you that he has
reviewed it and it's "in line" with the industry. He might quote the Department of Labor's
contention that "401K costs are trending down." But even if that’s accurate, they have A LOT
farther to fall; "reasonableness" shouldn’t be based on the
collective failure of the industry. A
typical 401K plan, comprised of actively managed funds costs about 150 basis
points on average. It can and should
cost closer to 40. Is your cost really
“reasonable” at 145?!
2. Index funds outperform actively managed funds 80% of
the time. Don't believe it? There are endless studies that prove it. Check out the latest Dalbar Study for great
set of numbers and charts. Why on earth
would you subject your employees’ money to higher, non-productive cost?
Actively managed funds outperform the index so infrequently (and the rare
winners never repeat), the event can only be characterized as a lucky
guess. Wouldn’t you rather tell
employees that your plan helps them succeed by not subjecting them to guesswork
and excessive cost?
3. Employees aren't participating. Depending on the industry, 40-60%
participation is the norm. Put another
way, that’s 40-60% of employees that don’t have a retirement plan. Does that meet your definition of
success?
4. Participants are lost and have no hope.
Lost: According
to a recent Charles Schwab survey, “But
more than half of the 401(k) savers said their plan’s investment options are
more confusing than their health-care benefits, and 57% said they wish it were
easier to choose among their plan’s investing choices.
Forty-six
percent of savers said they don’t know what their best investment options are,
and 34% said deciding how to invest in their 401(k) is causing them a lot of
stress. (The survey respondents ranged in age from 25 to 75, and worked at
companies with 25 or more employees.)”
No Hope: According
to a recent article on Yahoo Finance, only 13% of people with 401K accounts
think they will have enough to retire with.
5. Its highly
likely that you can lower the cost of your plan by 50% or more and make it more
successful for both your company and your employees. Do you still have actively-managed funds in
your plan? Are you still hoping to turn
employees/participants into investment pros?
Are nearly all your people in your plan?
Are your participants saving enough?
Are participants exhibiting good investment behavior with their
accumulated savings? Only you know the
answers to these questions and only you know whether your plan is
successful. If it’s not, it’s time to
overthrow your plan and the advisor(s) that got you to where you are today.
Rest assured—there is a better way! Visit us at www.401kRevolt.com to learn more!
