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Why 401(k) investment choices don’t matter anymore

The smart plan sponsors are now requiring service providers to frame investment due diligence not just in traditional terms, but in the new language of behavioral finance.

By Chris Carosa | Updated on February 04, 2015

If you’re as old as me, you spent the better part of your career first learning Modern Portfolio Theory as a theory, then seeing it put into practice, until finally watching it flail in agony as market gyrations proved what the contrarians were saying all along.

While entertaining, practitioners remained more concerned with the everyday business of marketing, selling, and servicing. In retrospect, making the sales process more important than actual investment results was MPT’s greatest gift to the industry. In essence, it made the sizzle more important than the steak. 

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