Investors in defined contribution plans through Charles Schwab & Co. will receive the companys investment advice for free, the company announced Monday.
The service extends beyond the offerings that standard participants receive and fills a needed gap, said Walter W. Bettinger II, president of Charles Schwab Corporate Services. "Until now, participants have been hampered by the lack of access to objective investment advice and by prohibitive costs. By providing access to specific recommendations of a qualified third-party investment advice provider at no additional cost, we believe Schwab can help 401(k) participants better meet their retirement savings goals," Bettinger said.
Plan participants will receive investment advice and the option for automatic rebalancing at no cost. Advice is provided either online, over the phone or in person, and is based on recommendations from GuidedSaving, a system developed by advisory firm GuidedChoice. GuidedSavings collects information on a participants financial situation, gives advice, and then monitors the account on an ongoing basis.
Adding these features will increase participation and contribution rates, Bettinger predicted, because lack of advice has kept many employees from taking part in 401(k) plans.