Daisy Maxey
speaker
120 appearances
2 recordings
1 series
first heard Oct 2017
last heard Dec 2019
Daisy Maxey’s voice in public audio — every appearance, attributed to the second.
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Appearances
WSJ Your Money Briefing · Picking 401(k) Funds Can Be as Easy as ABC, and That's Bad · 11 Dec 2019
podcast
Well, they may not be doing it in the most effective way.
And one of the researchers said he found it absolutely amazing how powerful this effect is and how much it's really distorting what's being invested in.
So, you know, there are several positive things that could be taken out of this research.
One is, and this is something the researchers have suggested, is that maybe plan sponsors could think about more strategically, a more strategic way to list the investment options within a 401k plan.
Say,
put the ones with the lowest expense ratio at the top.
And that would encourage people who go through to pick them maybe to choose funds that have lower expenses.
And also just recognizing this bias, even if plan participants are aware of it, they might be more liable to go through and really look at the funds more critically.
And if plan sponsors and administrators are aware of it, they could think about better ways to organize the funds.
Oh, that's true.
This is a well-known bias that influences many decision processes.
Prior research has found that stocks of companies with names at the beginning of the alphabet have higher trading volumes.
And even that politicians with names early in the alphabet are more likely to be elected than their competitors and scholars with names earlier.
with last names that are early in the alphabet, are invited to review papers more often.
But what researchers found unique about this particular research on the 401k plans was that they were quite surprised to find that this effect holds true with data sets as small as the groups of funds offered in these 401k plans.
Well, it depends on who you ask.
But a lot of financial advisors are busy telling their clients no.
I mean, they're in a very unique position because many of them have a fiduciary duty.
And they consider Bitcoin still a very speculative and risky investment.
So they're warning clients not to invest.
Showing 21–40 of 120 · page 2 of 6
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