The other day I got an envelope in the mail. It was an offer (through my 401(k)) to sign up with a retirement advice company. My employer signed up through them to offer a retirement portfolio management service.
My first response was: No Way. I’m not paying some people to do something I could do for free!
But then I read the paperwork they sent me. Apparently I have two options available to me. I can use their site for free to continue to manage my 401(k) on my own. Or I can pay a fee to have them plan out, monitor, and rebalance my portfolio. Of course, the paperwork tries to point out how much better things would be if I did pay them for help. They included stats/graphs showing that if you get their help, you’re likely to improve your return over the long run.
So, will I sign up? Turns out they’re offering a few free months to hook you onto the “paid” plan. The fees actually aren’t horrible, and it’ll be nice to actually talk to someone about my fund selection. Plus, I can import my other retirement accounts (like my Roth IRA and rollover IRA). I’ve tried out their free program, and it has some decent advice (like how to reallocate my funds to have a slightly more aggressive portfolio) and what other funds I could invest in within my IRAs. It also told me to increase my contributions from 5% to 7%. So, I actually already changed the contribution amount. It was an easy change that made sense.
As for the fund recommendations, they aren’t quite right. For example, one of the funds they suggested I invest my Roth IRA in has a $1million minimum investment. Um, no. But it’s putting me on the right track, I guess. I could look for similar funds that don’t have outrageous minimums or high fees.
I think I’ll try out the paid program, get my portfolio in order, then switch to the free advice system. It sounds like Krystal is also thinking about briefly trying a financial advisor, then continuing to manage her portfolio herself.
So, like Krystal asked, would you pay for someone to manage your portfolio? Would you pay for just advice? I’ll admit, while I think I’ve got personal finance stuff covered, I’m not very confident about my investing skills. So, trying this out to start, but then trying to learn more along the way (and shifting back to the free plan after the trial period is over) is the best way for me to approach this.