Beware if the firm running your 401(k) plan offers investment "education," the Government Accountability Office says in a new report.
Many 401(k) plans offer broad guidance to help workers make investment decisions. The advice typically comes under the rubric of "education" and stops short of recommending specific investments.
But what's portrayed as education actually may be a sales pitch, the study says.
Many firms that run 401(k) plans have financial incentives to push certain investments. They receive hidden payments from mutual funds in the plan. And some funds make higher payments, giving 401(k) providers a big incentive to tout them.
Firms are legally barred from recommending an investment simply to get a hidden payment. But there's nothing stopping them from subtly pushing a fund.