ORLANDO, Fla. — Investment advice, still in its infancy, will follow the same fast growth path that investment education has, according to F. William McNabb III, managing director, The Vanguard Group, Malvern, Pa.
Mr. McNabb was speaking at Pensions & Investments' Defined Contribution/401(k) Conference in Orlando, Feb. 8-10.
In addition to discussing offering investment advice vs. simply offering education, panelists and attendees discussed the fiduciary liability of 401(k) plan sponsors if they do or don't offer advice; the mutual fund scandals; the best investment choices; and the outlook from Washington for legislation that might affect defined contribution plans.
Mr. McNabb kicked off the conference with a wide-ranging speech that covered the mutual fund scandals, the state of the investment markets and the state of 401(k) plan assets, as well as broader issues affecting the defined contribution market.
"The U.S. model for defined contribution investing is working," he said. There had been concern about how defined contribution plan participants would react to a bear market, he added, but they "passed the test well" during the 2000-'02 bear market, and participants continued to invest in stocks.