Taking over two worlds
Originally published on: February 12, 2016
For everyday investors, managed accounts offer the best of two worlds. These clever investment tools combine the convenience of an all-in-one fund with the professional, active management features most such options lack. And in the retirement plan world, they’re slowly taking over.
According to a recent Fidelity study, an increasing number of retirement plans are offering managed account services as an option in their retirement plans. The number is up to 49% for the biggest companies. Whether they have them or not, more than half of employers think they’re a great idea.
What’s the attraction? The executive in charge of Fidelity’s managed accounts program says their greatest benefit is that they act as “shock absorbers,” smoothing the ride when markets get too crazy for comfort. Having professional management in charge prevents anxious investors from making decisions that are too conservative or aggressive for their needs.
That’s certainly important. It also helps soothe anxiety among corporate plan sponsors when their participants start to panic. But managed accounts do a lot more, and not just in a crisis.
Through boring times as well as volatile ones, professional managers can select the right balance of risk and reward for your long term needs, and choose the mix of investments to match it. They’ll rebalance your portfolio when it inevitably drifts away from your optimal distribution. They’ll update your strategy as your needs change. And as investments and markets evolve, they’ll keep your money up to speed with current best practices.
In short, they’ll manage your money better than most of us could hope to do on our own, and without the information gaps, emotional reactions, procrastination, and forgetfulness that plague do-it-yourself investors.
The problem is, this kind of management is usually available and affordable only if you happen to have a 401(k) that offers it. But what if you don’t?
That’s why we created the GuidedIRA. This easy-to-use account is like a regular IRA, but with professional investment advice and full-time management built in. For the retirement investors who wants it all, it’s the best of both worlds. And unlike the 401(k) kind, it’s available today in your world.
Image courtesy Ken Teegardin via Flickr Creative Commons