Investors Question 401(k) Performance Data

Many say they are not provided investment performance data from their adviser.

Forty-one percent of 401(k) investors say they are not provided or do not know if they are provided with investment performance information from their adviser or 401(k) provider, Phoenix Marketing International found in a survey. Additionally, 35% are not confident that the information is reliable.

“Real transparency isn’t simply throwing more data at investors,” says David Thompson, managing director of the financial services affluent practice eat Phoenix Marketing International. “It’s about providing investors with relevant, reliable and straightforward information about investment performance and progress towards goals, with an understanding of how they prioritize that information. At its core, the relationship between investors and investment advisers is based on trust. Transparent reporting may be the best tool advisers have to earn that trust, differentiate themselves and demonstrate their value.”

The survey also found that investors want information about the following:

  • Fee disclosures
  • Simplicity of information
  • Return metrics compared to benchmarks
  • Impact of performance on investor goals and objectives
  • Returns compared to other advisers
  • Returns compared to other investors with similar goals

“Through the eyes of some investors, a performance report crafted by an adviser or firm overseeing their investments is like a school report card written by a student,” Thompson says. “Confidence not only in the data and how it is presented but also who it comes from affects investor behavior and is a perception financial firms will want to address.”