When investors in 401(k) plans are given some kind of advice, whether it’s personal assistance in choosing their investment lineup, an advice tool or even a target-date fund that automatically adjusts holdings as an investor reaches closer to retirement, they enjoy higher returns, according to Charles Schwab.

Schwab, for instance, offers plan sponsors a retirement advice tool called Schwab Personal Retirement Planning that is administered by an independent investment advisor, GuidedChoice. Schwab found that investors who took advantage of this tool in 2006 earned an average of 14.11%, and those who did not earned 11.11%. In 2005, those who used the tool earned an average of 9.2%, compared to 6.6% by those who did not.

“It’s common knowledge that not contributing enough to receive the full 401(k) dollar match from your employer is the same as leaving money on the table, but employees are also potentially missing out on a valuable benefit if they are offered professional advice at no additional cost and do not take advantage of it,” said Jim McCool, executive vice president of Schwab Corporate & Retirement Services.

“It’s not surprising that people using advice are more likely to earn higher returns, but it is remarkable to see how much better they are doing, particularly among young people,” McCool added.

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