Retirement industry professionals take their own advice when it comes to diversifying portfolios, making contributions to DC plans to maximize company matches and rebalancing their portfolios regularly.
“They practice what they preach,” said Jeri Savage, managing director, defined contribution research, at Norwalk, Conn.-based Rocaton Investment Advisors LLC, commenting on a survey conducted with Pensions & Investments. “They are performing in a way consistent what they are telling others to do.”
Among the survey results of 450 people in the DC consulting, record keeping and money management fields:
- Seventy-four percent said they contributed the maximum amount to their plan, while another 21% said they contributed at least enough to qualify for the full company match;
- Forty-six percent of respondents describing themselves as do-it-yourselfers said they changed their allocations or rebalanced in the past three months, while another 33% said they took action in the past three to 12 months.
- Half of the respondents said they would at least consider investing in a retirement income strategy with longevity protection if their plans offered it, and 16% said they definitely would invest in such a strategy.
Ms. Savage noted the respondents parted company with the average DC participants by admitting to being more aggressive investors. “This is an educated group, so they skew aggressive,” she said.
Forty percent of all respondents said they invest “somewhat more aggressively” than what a financial professional, managed account or target-date fund might specify for a participant of the same age. Another 14% said they invest “much more aggressively.”
Among do-it-yourself investors, 45% said they invested “somewhat more aggressively” and 17% said they invested “much more aggressively” than what a financial professional, managed account or target-date fund might specify for someone of the same age.
Do-it-yourselfers accounted for 71% of the respondents. The other 29% said they used their plan's default option or professionally managed option.
This article originally appeared in the March 3, 2014 print issue as, "Execs 'practice what they preach'".