Sometimes knowing where to go for answers is as important as the answers themselves.
When we are talking about 401(k)s, there are three places to consider looking for investment advice.
1. Many company plans offer sponsored tools such as online tutorials that will walk you through investment strategies.
2. Some plans offer professional advice as well. The law says companies can offer investment advice from an adviser as long as the adviser is compensated the same amount, no matter the investment recommendation or how the plan participants invest. This levels the playing field.
3. Consider using your own money to find an investment professional outside of your plan. This person is guaranteed to be impartial.
Now, these investment advisers make their money in one or a combination of these ways.
Percentage of assets invested.
Fee only (usually hourly).
Make sure you know how your adviser is making money. Commissioned advisers make money by selling products, so you need to know his or her track record of investment success. Ask to see the costs, past performance and rankings of the funds the adviser recommends.
Bottom line: Understand your options. Regardless of how you choose to get your advice, studies have shown that employees who take advantage of advice do better than their peers who just invest on their own. Just makes sense.