7 ms·
No, employees can opt-out and make trades as they wish. We add extra fund options to each plan to make sure that this is possible. That said, we've found that
by psawaya 11y ago
No, employees can opt-out and make trades as they wish. We add extra fund options to each plan to make sure that this is possible.
That said, we've found that most 401k users don't want to bother with analyzing and choosing between dozens of confusingly-named funds. They're much happier (and better off financially) with a solution that automatically gives them a globally diversified, low-cost, regularly-rebalanced portfolio without doing any of the work.
- vonmoltke 11y agoThat said, why do you think your robo advisors will be better at this than Vanguard's target retirement funds?
- roger_lee 11y agoFor 401k plans that have access to Vanguard's target date funds, they can be a decent choice. Unfortunately, the majority of 401k's don't even offer Vanguard as an option -- instead, employees are stuck with high-fee mutual funds because they give kickbacks to the 401k company. That said, employees using our investment advice get additional diversification (6-7 asset classes), as well as a more personalized recommendation that takes into account not just your age, but also your risk tolerance, financial situation, other investments, etc. We think that's better than a one-size-fits-all fund.
- vonmoltke 11y agoGuess my wife and I have been lucky. My 401ks have always offered good funds, and hers is actually managed by Vanguard.