- Keep the menu simple. A plan can adhere to ERISA without being inundating with options. A plan participant may struggle in choosing the allocation that meets their needs with too many choices. Consider choosing 8-12 core options that range from different asset classes and capitalization spectrums, passive and active, and globally. A target-date option may be prudent as well for those participants that do not want to manage their own account.
- Know your target market. Consider recommending investments that align with the average participant of the plan. This entails having a deep understanding of the group’s investment experience, overall risk tolerance, ages and savings rates.
- Investment prudence. An adviser must conduct the necessary due diligence to fully understand an offering’s value to an organization. This includes understanding the investment mandate and its strengths and weaknesses, the relevant risk statistics, performance and fees. Monitor the offerings to keep the menu fresh.
Benefits Think Don’t overdo the modern investment menu
Published
3 Min Read
Jess DeGabriele
Investment Strategist
DeGabriele, CRPS, is an investment strategist with LHD Retirement.
