401K Management Techniques | 3 Smart 401K Management Practices



There are affective 401K management techniques that every account holder needs to know about. The best 401K advisers are constantly endeavoring to maximize the value of their clients’ accounts, click here to learn more. In order to achieve this perpetual goal, these advisers understand that certain actions yield superior results, and others do not. Here are three of the most effective 401K management techniques and practices that your financial adviser should be incorporating into your overall investment strategy:


3 Smart 401K Management Techniques


Educating Clients

Effective 401K managers take the time to educate their clients about investing, retirement and more. They do more than simply read scripts to them in order to answer specific questions. Likewise, they do not simply shoot the plan participant an email with some educational links. They do more than that. They take a professional interest in teaching their clients what they need to know, first-hand.


They work together with their clients, on one-on-one bases, to achieve the level of investment understanding necessary. By proactively educating their clients, and taking the time to answer individually unique questions, in detail, the expert 401K manager helps to prepare the client for long-term retirement success.


Correct Rollovers

The most efficient 401K managers also place a heavy emphasis on ensuring correctly performed rollovers. They want their plan participants to become very well versed in all aspects of their rollover options. 401K participants who have reached retirement age, or are just changing jobs, need to be expertly informed about their options. When they are, they can approach and negotiate with rollover service vendors, cutting out the middleman.


This gets rid of the intermediary’s commission, thereby leaving more money in the fund. One primary goal of any high-quality 401K manager is to maximize the amount of value of each participant’s fund – and incorrectly performed rollovers are some of the most expensive mistakes 401K participants incur.


Periodic Vendor Reviews

The best 401K managing firms and individuals recognize the importance of performing periodic vendor reviews. The standard is to review each vendor about every 3 years. This is a “best” practice of fiduciary governance in general and provides records for the client’s long-term fiduciary audit file.


In the past, it was common to encourage sticking with same vendors for as long as possible. This type of relationship was driven mainly by brokers, when the entire retirement financial realm was structured quite differently.


The strongest 401K managing techniques are those which create experts out of investors. For the most part, fixed-amount pension plans are things of the past. Today, pending retirees need to place directed attention to understanding their available options with their 401K funds.


401K managers and other financial advisers need to direct professional efforts to finding the most effective ways to educate their clients. 401K participants are encouraged to dive in and actively participate in educating themselves. The more you know as an investor, of any type, the better off you’re bound to fare in the long-run. And for the best 401K managers, long-term success is what it’s all about.


About the Author

Financial professional and online entrepreneur, I'm best known as The Financial Blogger. I want to make money because I like enjoying life the way it should be; with a lot of great food and wine! I also love to spend time with my lovely wife and 3 kids!