Final Jeopardy……What Is A 401k Advisor?

19 Jun    Estate Planning

Alex does not need to be looking for this answer to make you sweat but there is no reason to sweat anyway.

Let’s say you invested $180k in a brand new Maserati and after 10,000 miles you heard a knocking in your engine. Would you jack that huge investment up in your garage and start tinkering with the engine?

Unless you are a qualified mechanic you should not mess with a major investment like that and the same is true of your 401k. Have you spent 10 years getting a degree in financial planning and have done intensive study of the markets and what investments will serve your retirement plans best?  If the answer to that question is no yet you find yourself tooling around on your iPad2 after dinner trying to manage your 401K, you are asking for trouble.

Are there some amateur investors who make some great choices? Sure, but they are as rare as a Triple Crown Winner and about as wise a bet. So unless your login on your investing website is ‘Justified’ you need a 401k advisor.

401k advisors spend the lion’s share of their time focused on understanding their retirement goals of their clients and then match them up with those investments that will help to reach those goals with the right balance of risk and reward. Their job is to not only keep their finger on the pulse of your investment plan but also on the pulse of the markets so that they can help you to manage your investments for the greatest return on investment for your retirement.

The most important question you can ask if you have read this far and understand the need for a 401k advisor is how do I choose the right advisor. In a excellent recent article at, eight questions you need to ask your 401k advisor are laid out but we chose to focus on three key questions you need to ask initially:

  1. Are you a fiduciary for the recommendations you make? – By far the most important question as the answer will provide you with an idea of quality of the advice available. If the advice is in your best interest you are on the right track. If the advice is in the best interest of the 401k adviser you need to consider your next step wisely.
  2. How are you paid? – Investment advisers acting as fiduciaries working for RIAs are more likely to only accept fees paid by clients. Investment advisors working for banks, brokerage firms and insurance companies generally receive not only commissions and fees from clients but they can also receive soft dollar payments from mutual fund companies they drive business to.
  3. What professional credentials do you have? – Retirement plan sponsors should work with investment advisers who have some sort of retirement plan-related credentials (AIF, CRPS, QPFC or CPC). Nearly all credentialing programs have a professional experience requirement as well, which means that properly credentialed advisors have a minimum of experience necessary.

Shapiro Financial Planning Group offer credential and experienced 401k advisor services to help you to navigate a path to the retirement you dream of. We are available for consultations by phone or in person.