Unsurprisingly, given the
market slumps of August, a record number of people sought guidance by phone and
online in the third quarter, according to data from Fidelity.
Fidelity managed more than 16
million online inquiries from IRA and 401(k) investors from August 23 to August
29. In a single day—Monday, August 24—Fidelity received over 160,000 phone
calls from IRA and 401(k) investors, one of its busiest days on record.
Customers wanted help on a range of topics: how to manage investments during
periods of volatility, the pitfalls of converting to all cash and the possible
reasons behind recent market drops.
For many people, plummeting
stock prices mean it’s time to hit the panic button and sell. But surprisingly,
most Fidelity investors stayed the course and did not make significant changes
to their asset allocation or contribution amount. Just 4.9% of 401(k) account holders
changed their asset allocation in the quarter.
The quarter showed an average
total 401(k) contribution amount of $2,610, a slight dip from the previous
quarter’s $2,770, but consistent with the same quarter a year ago: $2,670. The
average 401(k) contribution rate was 8.2%, up from 8% a year ago. IRA contributions
also remained consistent, as IRA account holders contributed an average of
$1,260 in the quarter, close to the average contribution amount of $1,270 in
the same quarter a year ago.
Major market volatility,
whether up or down, should be viewed as an opportunity for investors to assess
their overall financial wellness, says Doug Fisher, senior vice president,
Advisers can include a review
of their retirement savings and asset allocation, and even ripple out more
widely to a basic assessment of financial health, including overall family
spending and budgeting.
based its analysis based on 21,400 corporate defined contribution plans and
13.6 million participants, as of September 30. These figures include the adviser-sold
market, but excluding the tax-exempt market. Also excluded are non-qualified
defined contribution plans and plans for Fidelity’s own employees. Fidelity’s
IRA analysis is based on 6 million IRA customers.