The Value of Guidance…
Improved Returns = More Money for Retirement

The insurance company, John Hancock, commissioned a study to measure the investment returns of more than 14,000 participants in 401(k) programs from 1997-2006. They compared the investment returns of those participants to a group who had used a professionally managed program.

The study found that 84% of the participants would have had much higher returns if they used professionally managed portfolios rather than choosing their investments alone.

The investment results for the professionally managed group were 7.2% vs. the5.3% for the “do-it-yourselfers.” ⁽¹⁾

A second study conducted by an independent firm, DALBAR Financial Services, discovered a far more disturbing picture. DALBAR’s study showed that the average investor earned only 4.3% annually during the period 1987-2006. For this same period, the S&P500 Index returned 11.8% per year  - a  significant difference of 7.5%. ⁽²⁾

Both studies clearly demonstrate the advantage of using professional advice to manage retirement portfolios. Simply stated: The higher the investment return from a professionally managed portfolio, the more money there will be retirement.

For further information or any questions about retirement planning, contact us!

1. Burgess + Associates, 2007. The Burgess Study was commissioned by John Hancock Co.
2. (2) Source: DALBAR, 2007, Quantitative Analysis of Investor Behavior.