The business of providing investment advice to 401(k) plan participants is still in its infancy, but it seems to be taking two steps forward.
One step: Hewitt Associates LLC, Lincolnshire, Ill., has entered into an alliance with 401k Forum Inc., a San Francisco-based independent investment advice provider.
Another: Financial Engines, Palo Alto, Calif., a competitor of 401k Forum, reached an agreement to provide advice to participants of the $58 million Air Line Pilots Association 401(k) plan.
The 401k Forum/Hewitt alliance is not an exclusive arrangement, said Scott Peterson, Hewitt's practice leader, defined contribution services. Hewitt already has an alliance with Financial Engines, and added a second advice giver to give clients a choice, he said.
Likewise, this is 401k Forum's second alliance (its first was with Arthur Andersen LLP). David A. Peckman, 401k Forum vice president, said the new alliance gives his company access to Hewitt's plan sponsor clients.
One advantage of working with Hewitt: Hewitt doesn't manage money, so Mr. Peckman doesn't envision any potential parties-in-interest problems that would lead to applying for an exemption with the Labor Department.
Meanwhile, the Financial Engines' deal with the pilots association involves ALPA's staff pension fund.
Neither David Vance, director of retirement and insurance for ALPA, nor Robert Lipsey, ALPA's pension and investments coordinator, would comment outside a written statement.
"After conducting a careful evaluation of online investment advisory services, we chose Financial Engines because we believe it provides high-quality advice on how to invest 401(k) savings, giving users an actual forecast of the likelihood that they will reach their goals," Mr. Vance said in the statement.
