Just because staffers are reading the educational materials about their retirement plans, it doesn’t mean staffers are benefiting from those materials.
According to a recent John Hancock survey, 73% of employees use their companies’ educational materials to invest their 401(k) money, but only 15% of those employees found the materials helpful.
Moreover, the study found that 42% of defined-contribution participants said they have “little to no investment knowledge.”
If your employees are lacking knowledge, it could really affect their returns. Check out these findings — courtesy of DALBAR, a firm that provides ratings and ranking to the mutual fund, broker/dealer and banking industries:
From 1988 through 2008, the average equity investor earned 1.87% while the S&P 500 earned 8.41%.
Significance: Employees “missed” out on 6.54% of gains.
Solution: Look into getting independent investment advice for your employees from a registered advisor — one who doesn’t have any ties to the fund provider.