"But getting advice when the plan options are actively managed funds may not be an optimal solution," according to Towers Perrin's Daniels. "Many studies suggest that with or without an adviser, an active manager outperforms the index only about one out of three times." Says CFO Reiland, "So far, ProManage has done pretty well, at least as well as what we compare it to, if not a little better. Our funds have generally suffered less than other funds in the market."
Alix Nyberg is a staff writer at CFO.
Nurturing Nest Eggs
Some companies that specialize in the management of 401(k) money for employees.
Source: The companies
| Provider | Asset-Allocation Method | Service History | Cost |
| 401(k) Toolbox | Age and risk tolerance. | Has managed 401(k) funds for individuals since 1994; 65 companies offer its service. | A percent of assets based on account size — annual average is 1.25%. |
| Ibbotson Associates (through providers Merrill Lynch and Sun America) | Age, current salary, deferral rate, and risk profile if desired. | Has offered advice services since 1997. | Depends on provider. |
| ProManage | Age, pension, Social Security benefits, and current account balance. | In business since 1998. Has six clients and manages $100 million for participants within 401(k) plans. No advice services. | Asset-based fee applied only to service users (0.10% to 0.65%, depending on features). |
| Scarborough Retirement Services | Goals, years to retirement, and risk; participants placed in one of seven funds designed by Ibbotson Associates. | Has offered services to individuals since 1989; 10,000 customers use the service. | Flat $300 to $365 annual fee levied on service users. |
| Morningstar (in trial, set for introduction Q1 2003) | Age and other relevant criteria. | Has offered advice services to 401(k) participants since 2000. | Asset-based fee applied to service users only. |
Stock Solution
When transfers are made, they are away from equities.
Source: Hewitt Associates
| << Transfer Out | Transfer In >> |
| Money Market 12.3% | |
| GCI/Stable Value 44.3% | |
| Bond 37.5% | |
| -9.5% Balances | |
| -9.5% Lifestyles/Premix | |
| -42.3% Large U.S. Equity | |
| -3.2% Mid U.S. Equity | |
| Small U.S. Equity 2.3% | |
| -2.9% International | |
| Emerging Markets 1.1% | |
| -25.5% Large U.S. Equity |
Reader CommentsDisplaying 1 of 1
Jeff Sinatra
Jul 18, 2006 11:00 AM ET
Personal 401(k) Management?
While the idea of a personalized managed account service is valuable, the companies listed fall a little short of a … more
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