Plan Sponsors Ask…

Q: Participants seem to need help figuring out the best approach to take with their 401(k) plan investments. How can we help them?

A: Many employers share your concerns, because financial decisions today will undoubtedly have considerable impact on future retirements. Your desire to help is commendable. But it’s important that you know the difference between providing financial education and financial advice, and that your service provider does, too. Generally speaking, you or your service providers can provide investment education without fear of triggering a prohibited transaction — an event with serious plan qualification implications. Such education is general in nature. For example, you can explain asset allocation, diversification, and dollar-cost averaging. Investment advice is more specific to an individual. Avoid telling a participant what they “should” invest in, even if it’s something you personally do. For more information about this important topic, click here to read the article, “The Difference Between Investment Education and Advice,” from Financial Finesse and published on


Consider TRA's 3(16) Fiduciary Services & Plan Administration

To alleviate the day-to-day administrative burdens of yours or your clients retirement plans.