NEW YORK (AP) Help is on the way for workers who find it difficult to manage their 401(k) retirement accounts.
Many employees already have free access to Internet-based calculators, which allow them to set savings goals, evaluate their risk tolerance and choose investments. But some are befuddled when it comes to selecting specific funds or rebalancing their accounts.
A recent study by the human resources consulting firm Hewitt Associates found that nearly 45 percent of workers feel they don't have enough information to make the right investment choices, and more than half want help in making investment decisions.
Such findings have spurred 401(k) providers to begin offering individual advice for workers and, in some cases, actually taking over management of workers' retirement accounts for an annual fee.
''Companies are shifting focus from offering more choice (in investment options) to offering more help,'' said Jeff Maggioncalda, president and chief executive officer of Financial Engines in Palo Alto, Calif.
The reason, he said, is that ''most employees are saying, 'I don't have the time or the expertise to do this myself.'''
Financial Engines, best known for its online calculators, recently rolled out a Personal Asset Manager. Pilot runs at Motorola Inc., the telecommunications company, and retailer J.C. Penney Co. found that up to 18 percent of workers wanted ''do-it-for-me'' managed accounts, Maggioncalda said.
The new offerings are proliferating in part because of a 2002 Labor Department ruling permitting companies to offer advice services as long as an independent firm is hired to give it. They also got a boost from the 2000-2002 market downturn, which cost unsophisticated investors millions.
David Wray, president of the Profit Sharing/401(k) Council of America, a trade group based in Chicago, said that more than half of all retirement plans have advice components, via the Internet or call centers or in person advisers. About 11 percent were offering managed accounts in 2002, ''and this is growing very rapidly,'' Wray said.
Already, 401(k) providers like Fidelity Investments, AIG, Merrill Lynch and Wachovia Retirement Services are offering employees account management for a fee, generally in a range of 0.3 percent to 1 percent of assets a year.
Charles Schwab Retirement Plan Services last fall began offering free advice to participants in plans it manages.
Schwab uses GuidedChoice, an independent investment advice service, that workers can access on the Web, through a call center or at an in-person meeting with an adviser, said Walt Bettinger, president of Charles Schwab Corporate Services. After selecting a portfolio, they can also sign up for automatic rebalancing every year, he added.
''We're seeing participants increasing their savings rates, and they're shifting their asset allocations to something more in line with long-term, diversified investing strategy,'' Bettinger said.
Not everyone is thrilled with the trend.
John Blossom, president of the Alliance Benefit Group, a firm in Peoria, Ill., that provides record keeping and investment services to retirement plans, believes the emphasis should be on better-designed plans that are easy for employees to navigate.
''What's happening now is companies looking for one-on-one advice for poorly constructed plans,'' he said.
Blossom recommends that every plan include risk-based asset allocation models ranging from aggressive portfolios invested heavily in stock funds to conservative portfolios with mostly bond funds that employees can adopt as is or personalize.
His firm also uses the quarterly statements mailed to workers to flag problems in their accounts. The statements can point out, for example, that workers have too much money in too few funds or that their balances are out of kilter with their investment selection.
But others argue that employees who don't have the skills to manage their retirement money deserve alternatives.
Timothy A. Chapman, chief executive officer of PMFM Inc. of Bogart, Ga., said his firm started in the mid-1990s providing management advice to Delta Air Lines pilots.
In 2000, PMFM created an online calculator, the 401(k) tool box, which allows investors to direct their own investments or select a ''manage it for me'' option. The Lincoln Financial Group is among the tool box users, he said.
Chapman said an increasing number of workers are signing up for managed accounts ''because they're willing to pay to get results they know will be better than they can on their own.''
He added: ''There's also that intangible of it's worth something to be able to sleep at night knowing someone is watching my money.''
On the Net:
www.pmfm.com and www.401ktoolbox.com
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