Many Americans pay little attention to their 401(k) (or other similar type account such as a 403(b) or 457 account), let alone to their entire portfolio. A recent article in the Wall Street Journal titled “401(k) Advice – For a Hefty Fee”, by Karen Blumenthal (January 29, 2011), pointed out some interesting statistics regarding 401(k) accounts:

(1) The Employee Benefit Research Institute and the Investment Company Institute (a fund-industry trade group) reported that 17% of 401(k) account holders in their twenties owned little or no stock. Young investors should generally hold more stock in their portfolios than bonds, unless they are saving for a short-term goal.

(2) The article also reported that in those 401(k) accounts where company stock was a choice, 30 percent of those over forty years of age held more than 20 percent of their account in their company’s stock. When times are bad and a company has problems that force it to lay off employees, the company stock price is usually depressed as well. Holding too much of your company’s stock is a risky thing to do.

(3) A Schwab study reported that 53 percent of investors found that selecting 401(k) options was more difficult than selecting health benefit options.

Ms. Blumenthal’s article focused on new services being offered by Schwab, Fidelity, Vanguard and J.P. Morgan Chase to help investors manage their 401(k) accounts. In some cases, investors can quiz a financial planner and in other cases they can pay to have their account managed for $40 to $60 a year for every $10,000 managed (0.4% to 0.6% of the amount managed). Accounts over $100,000 pay less. Those fees are in addition to mutual fund fees.

Ms. Blumenthal notes that in many cases the management services are provided by outside third parties who act as a fiduciary for the investor. A fiduciary is required to act in the best interests of the client. Investors need to provide other information about their situation, such as how long they plan to work, other assets they have, etc.

One benefit of the approach is that those who sign up for these services generally tend to save more. A survey by Schwab showed that 70% of those receiving help nearly doubled their savings rate. Apparently, when one gets serious enough to pay for help they make more of an effort to save.

This new support can make a difference in your long-term financial success. It’s not cheap, however, and still leaves the need to manage other accounts outside your 401(k) as well as your other financial affairs. Another option is to consider working with a financial planner to develop a comprehensive financial plan that addresses your total financial well-being.