• Can they distinguish between active and passive; large cap, mid cap, and small cap; equity and fixed income?

• Can they properly allocate among those asset classes to make them work together congruently with their risk tolerance?

• Are they able to overcome their innate fears to consistently make good decisions in times of market stress?

• Workers spend more time researching options for a new car or going on a vacation than in researching 401(k) investment choices.2

• Over the 20-year period ending in 2014, a 60/40 portfolio yielded an average annual return of 8.7%. The average individual investor? A mere 2.5%.1 (See example on Figure 1.)

1. Addressing participants’ particular risk tolerance, time frame, goals, and lifestyle.

Not all people at the same age have the same risk tolerance, and not all people entering retirement have the same lifestyle.

2. Eliminating any and all proprietary bias.

Is it prudent to place 100% of your participants’ retirement savings with one investment company? Is it likely that one company has all of the best funds? A non-proprietary investment process opens the door to lower cost, better-performing investments.

3. Providing education and simple methods for participants to identify the appropriate allocation.

An appropriate do-it-for-me strategy should be accompanied by educational tools, such as a straightforward risk assessment.

4. Accountability from your fiduciary partner to participants and plan sponsors.

A fiduciary investment manager is subject to ERISA’s duty of loyalty – to make decisions in the best interests of your participants and beneficiaries. Without a fiduciary manager, a plan’s trustees, committee members, or other fiduciaries retain the responsibility for choices made.