What to do with their 401(k) account plan is one of the most financially significant decisions employees must make when retiring or changing jobs. Making the wrong decision can undo much of the positives resulting from years of disciplined savings.
The Saleman's Approach
A significant factor that often complicates the rollover decision process is that 401(k) rollovers represent a sizeable sales and revenue opportunity for the brokers, agents, bank reps who operate under the Suitability Standard of Care. The sale of mutual funds or annuities can represent undisclosed fees and/or commissions that range from 2%-8% (or more) of the amount invested. The potential for conflicts of interest that can cause the client's best interest to become secondary is obvious.
Cygnet's Fiduciary Approach
By contrast, Registered Investment Advisors ("RIA") like Cygnet act as fiduciaries and are legally obligated to place the client's best interest ahead of all other considerations. And, when a conflict of interest does exist, fiduciaries must resolve it in the client's favor. Finally, because RIAs charge an annual fee for their advice (roughly 0.50% to 1.50%) as opposed to receiving a sales commission, any conflicts that arise from the potential of a big pay day are minimized.
Cygnet's expertise and experience providing individuals and 401(k) plans with financial planning and investment advisory services make us uniquely suited to assist plan participants with their rollover decisions.