Why Financial Advisors Should Offer Investment Education to 401(k) Plan Participants


One of the major cornerstones of our society is public education. Regardless of race, religion, creed, gender, income, or national origin, children from kindergarten through the twelfth grade are entitled to a free education because our society valued educations Education helps individuals to attain intellectual, physical and spiritual or emotional progress. Public education offers no guarantees, but it can offer a lot of opportunities for individuals to progress as human beings. The same thing can be said of offering investment education to plan participants.

When it comes to being a retirement plan financial advisor, too many advisors concentrate on the concepts that aren’t as important as they seem, such as picking out mutual funds or making cute brochures. The most important role a financial advisor has in working with a retirement plan is minimizing the fiduciary liability that a plan sponsor and the plan trustees have when handling the process of plan investments. So while much has been written about the needs of developing an investment policy statement (IPS) and reviewing the plan investments based on that IPS, very little attention is paid to the role of providing education to participants when the investments under the Plan are directed by these participants.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ary Rosenbaum, The Rosenbaum Law Firm P.C. | Attorney Advertising

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