The public relations spin of the largest financial services companies in the U.S. continues to amaze me. Let me give you a recent example.

The Vanguard Group recently released a study that states more individual company retirement plan participants are handing over the investment management of their 401(k) accounts to professional money managers.

The study also states that individual company retirement plan participants now favor new investment advice programs offered by their company retirement plan providers.

That trend has been in place with Minnesota company retirement plan participants for many years.

Here is the spin.  Mutual funds are managed by professional money managers. The investment management decisions for all individual company retirement plan participants are handled by professional money managers.

The Vanguard study is not new news. It is just a spin of old news.

A company retirement plan menu is a collection of individual mutual funds that invest in the same stocks and bonds. The only thing that is different is the name of the mutual fund.

When the U.S. economy and stock markets go up, the value of your individual company retirement plan account will increase.  When the trend changes, the value of your individual company retirement plan account is at risk.

Mutual fund managers only know how to buy-and-hold.  They don’t manage the stock and bond market risk in your company retirement plan account.

A risk management game plan is only available from an independent third-party investment advisor who you hire. That investment advisor is responsible for the preservation and growth of you individual company retirement plan account.

A mutual fund is a mutual fund. It always has been.  It is not new news to state otherwise.

Ric Lager
Lager & Company, Inc.

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