401k Investments

In an effort to keep clients and business partners up to date on emerging trends and developments relating to 401k investments, Lawton Retirement Plan Consultants, LLC suggests the following resources.

401k Best Practices: Investments. Interested in how your 401k investment menu stacks up versus the marketplace? Take a look at this post, which outlines current best practices for 401k investment menus.

401k Loans: The Worst Possible Investment. Find out why 401k loans are the worst investment anyone could possibly make.

8 Tough Questions To Ask Your 401k Investment Advisor. Are you working with the right 401k investment advisor? Do you want to find out? Ask your advisor the eight questions contained in this piece and then see how the answers compare with the generally desired responses outlined in this post.

9 Important Questions To Ask Your Financial Advisor. Find out what questions you should be asking your financial advisor to learn about compensation, fiduciary responsibility, experience and qualifications.

BlackRock Interview With Robert C. Lawton (PDF). Robert C. Lawton, President of Lawton Retirement Plan Consultants, is interviewed by former Wall Street Journal editor and BlackRock executive Kelly Greene on how to design the best 401k plan.

Blending Active And Passive Options In Your 401k Plan. The folks at BlackRock, the largest asset manager in the world, shared research that indicates that a blend of active and passive 401k investments is probably best for most 401k plans.

Does Your 401k Investment Adviser Measure Up? Each year retirement plan sponsors should take the time to evaluate their providers. Included in this group is your 401k investment adviser. Most plan sponsors use an investment adviser to help them with their 401k plans. This is a smart decision since many advisers are able to save plan sponsors at least as much as they charge. This post will help you learn if you are working with the right 401k investment adviser.

Fiduciary Investment Advisers Add More Than 6% In Value. Each year Russell Investments does a nice job calculating the value of working with an investment advisor. Find out in this post why I believe an investment adviser acting as a fiduciary adds more than 6% in value to your plan each year.

How 401k Plan Participants Can Beat The Market. Many studies have shown that the average 401k participant earns at least 2% to 3% less each year than the mutual funds in their plan. How can this be? This post presents suggestions on how plan sponsors can help participants do better.

How To Know If You Are Getting Good Investment Advice. How do 401k plan sponsors know if they are receiving good investment advice? That question is more difficult to answer for plan sponsors than it is for individual investors since plan sponsors need to be more concerned about process than performance. It is not necessary for plan sponsors to offer the best performing funds in their 401k plans. Rather, they should be more concerned that the process used to select and monitor the investment options offered is compliant and sound. Check out this post to learn if you are receiving good investment advice.

How To Use Active Management In Your 401k Plan. A passive investment management approach is appropriate for many 401k plan participants. But indexing isn’t right for everyone. Many participants are not satisfied with market average returns. Nor do they feel it makes sense to lock in 100% of every market decline. Those are only a few of the reasons to consider active investment management. This post lists many others. 

Listen To Your Participants: Don’t White Label 401k Investment Funds. I don’t believe that white labeling your 401k investment options makes sense, for the reasons outlined in this post.

Most 401k Investors Fall Into Four Core Groups (PDF). I have done a lot of 401k participant education sessions over the years. As a result, I may know your 401k plan participants better than you do (without ever having met them!). That’s because I have found that most 401k plans have similar participant investor groups.

Should You Offer Only Index Funds In Your 401k Plan? Is it a good idea to remove all of the actively managed funds from your 401k plan and offer only passive 401k investments? Why would a plan sponsor do that? A number of large plan sponsors have dumped all of their actively managed funds, for the reasons outlined in this post.

Should Your 401k Plan Offer ESG Investment Options? At the very least, your Investment Committee should have a discussion about offering ESG 401k investments in your plan. This post explains why.

Socially Responsible Investing Ratings Can Boost Your 401k’s Value. Recently Morningstar, creator of the Morningstar Star Ratings for mutual funds, introduced Sustainability Ratings to gauge an investment’s adherence to Socially Responsible Investment principles. 401k plan participants, millennials especially, have become interested in socially conscious and impact investing. Your 401k plan can have greater value to your employees if you begin sharing Morningstar’s Sustainability Ratings for your 401k investment options.

What To Look For In A Top 401k Investment Adviser. Most employer plan sponsors use an investment adviser to help them with their 401k plans. This is a smart decision since most advisers are able to save plan sponsors at least as much as they charge. How can you tell if you are working with a good investment adviser? This post provides some tips.

Why You Shouldn’t Use Custom TDFs In Your 401k. Custom TDFs can be expensive and constructed based upon dubious assumptions. You may want to think twice about using them in your plan.

Why TDFs Are The Best Professionally Managed 401k Investment Option. Target date funds (TDFs) have certain advantages over other professionally managed options that you can offer in your 401k plan. Find out why TDFs are better in this post.

Why Target-Risk Funds Are Wrong For 401k Plans. Are target-risk funds appropriate for 401k plans? I don’t think so. This post tells you why.

Your 401k Investment Committee’s Most Important Fiduciary Responsibilities. Ever wonder whether you are discussing the correct things at your investment committee meetings? Find out what you should be talking about in this post.

Your 401k Plan’s IPS Should Include These Items. Does your 401k plan have an updated Investment Policy Statement (IPS)? Although you aren’t required by law to have one, the IPS is one of your plan’s most important documents. Take a look at this post to learn why having an updated IPS is so important.

Additional Resources

Target Date Retirement Funds - Tips for ERISA Plan Fiduciaries, from the DoL

A helpful, short, three-page guide from the Department of Labor (DoL) on selecting target date funds for your 401k plan.

Unsure if the fees you’re paying your 401k providers are reasonable?


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12 Low-Cost Ways to Improve Your 401k Plan

After working with hundreds of 401k plans for more than 30 years, I have compiled a list of low-cost quick fixes that can make a big difference in your 401k plan. Click the button below and complete the form to download the list.