Are 401(k)s the ultimate retirement plan?
With the future of the Labor Department’s proposed retirement security rule currently underreview, advisors remain focused on their clients’ rollovers from 401(k) plans.
Whether this event is spurred by a job change or happens as the client enters retirement, it’s a crucial time for investors. It also provides RIAs with a unique opportunity to showcase and maintain their partnership with their clients.
While the retirement security rule, the latest iteration of the DOL’s fiduciary rule, continues to cause controversy, the spirit of the regulation is to make sure advisors are educating plan participants at the highest level, says David McBee, financial advisor at Concurrent, an independent firm.
Essentially, McBee says, advisors should be instructing the client on the entire financial planning process — everything from the pros and cons of a 401(k) plan, the limits of what the product will provide the client, how much it costs to work with a financial advisor, and the cost differentiator and the benefits that one might gain outside of a 401(k).
“That information needs to be given with this fiduciary mindset of, it’s really got to be fully disclosed, that these are your options,” McBee said.
“Making an educated decision and setting expectations for participants of what they should expect to get for different levels of costs is valuable. I believe it is much easier for any investor to grow their money than it is to create a distribution process. I think more people will fail trying to create income in retirement than they did trying to grow their money during work,” he said.
McBee says the spirit of the rule is good because while 10 or 15 years ago, everyone was likely advised to move their savings out of a 401(k) plan when
Read more on investmentnews.com
