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  • Christopher Carosa, CTFA posted an update in the group Investments 8 years, 3 months ago

    After decades of relying on “risk tolerance” questionnaires, how do you convince 401k plan sponsors and investors that they’re more dangerous than useful? What horror stories can you share? – As the attached link explains, since as early as 1999, it’s been widely known “risk tolerance” questionnaires are, at best, irrelevant and, at worst, misleading. Yet, the brokerage industry not condones, but in some cases mandates their use. This has left many 401k plan sponsors and investors falsely believing emotions trump mathematics. The fact is, what a person needs to retire comfortably is a investment return percentage based on firm inputs – current salary, current savings, annual contribution and retirement date. One’s attitude on risk does not change these numbers. Let’s have some fun and share some of the more ridiculous stories of “Risk Tolerance Questionnaires Gone Bad.”
    [bpfb_link url=’http://fiduciarynews.com/2013/08/should-401k-plan-sponsors-ban-risk-tolerance-questionnaires/’ title=’
    Should 401k Plan Sponsors Ban Risk Tolerance Questionnaires? | FiduciaryNews ‘ image=’http://fiduciarynews.com/wp-content/uploads/2013/08/517386_68751012_scanning_test_stock_xchng_royalty_free_300.jpg’]Exposed as misleading as early as 1999, should 401k plan sponsors continue to risk increasing their fiduciary liability by condoning their use?[/bpfb_link]

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