Workplace retirement plans, specifically 401(k)s, need a major overhaul, say advisors, who have to navigate them because they're essential if many clients are to reach their retirement goals. But familiar as 401(k)s are, planners love to hate them, and they'll readily cite long lists of faults with the plans themselves, as well as the way the $2.8 trillion 401(k) industry operates.
The most often cited problems with the plans: Not enough fiduciary advisors watch over them, participants don't know where to learn more about them, and fund choices are overly complex and don't go far enough to hedge risk. Considering that most Americans rely heavily on 401(k)s to build their portfolios, it's no wonder financial planners want to see the industry change.
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