Maximizing Your 401(k) Potential: The Value of a Professional Advisor

Jul 2024

Planning for retirement is a crucial aspect of financial management, and for many, a 401(k) plan serves as the cornerstone of their retirement savings strategy. While the allure of managing your own investments can be tempting, the complexities of retirement planning often require guidance from a professional advisor. In this blog, I’d like to explore the significant advantages of having a financial advisor, like Bloom Advisors, manage your 401(k).

Expertise in Investment Selection

Navigating the various investment options within a 401(k) plan can be daunting, especially for those without a background in finance. An experienced advisor can assess your risk tolerance, investment objectives, and timeline for investing to develop an investment strategy that is closely aligned with your specific situation. By carefully selecting investments that match your needs, we can help optimize your portfolio’s performance over the long term. This selection process is often far beyond the skillset of the everyday investor.

Strategic Asset Allocation

Asset allocation is a critical factor influencing investment returns and the volatility of your portfolio. We create a diversified asset allocation strategy based on a clients age, risk tolerance, and financial goals. In addition, we rebalance the portfolio periodically to maintain the desired asset mix, ensuring that investments continue to align with evolving circumstances and market conditions. This proactive approach helps minimize risk and enhances the potential for long-term returns.  Often investors will engage an advisor to help with their IRA and/or taxable account(s) and overlook their 401(k). However, it is critical to consider all your accounts when structuring an appropriate asset allocation strategy for your portfolio. If you choose to exclude your 401(k) from professional management, it is likely your portfolio will lack alignment to your overall risk level and potentially include asset duplication.

Financial Planning Beyond Investments

Bloom Advisors provides holistic financial planning services that takes into account retirement income planning, strategies to be more tax efficient, and estate planning considerations. By taking a comprehensive view of a client’s financial situation, including their 401(k), we help them make informed decisions that maximize their retirement savings and overall financial well-being.

Behavioral Coaching and Emotional Discipline

Investing can evoke emotional responses, especially during periods of market volatility. One of the most important roles we serve is a rational voice of reason, offering perspective, and guidance to prevent emotional decision-making that could harm long-term financial goals. We help clients stay disciplined during periods of market volatility  and adhere to their investment strategy, which enhances their chances of achieving their long-term goals. I can’t tell you how many times I have had clients ask to reduce contributions to their 401(k) during a market downturn, yet that is exactly the time to continue with those regular contributions and take advantage of cheaper prices to buy more shares.

Monitoring and Adjusting to Market Changes

Financial markets are dynamic and subject to fluctuations influenced by economic conditions, geopolitical events, and a variety of other factors. At Bloom, we continuously monitor market trends and economic developments, adjusting the portfolio as needed to capitalize on opportunities or minimize risks. This proactive approach ensures that your 401(k) remains aligned with your goals and adapts to changing market conditions, optimizing your chances of achieving your long-term goals.

Peace of Mind and Time Savings

One of the most valuable aspects of working with a financial advisor is the peace of mind it provides. Knowing that a qualified professional is overseeing your retirement savings can alleviate stress and uncertainty, allowing you to focus on other priorities in life. Additionally, outsourcing the management of your 401(k) to an advisor frees up your time, enabling you to pursue personal interests and professional endeavors without the burden required in managing your own finances.


While managing your own investments may seem appealing, the benefits of having a professional advisor manage your 401(k) are undeniable. If you are considering professional management of your 401(k), please contact one of our knowledgeable advisors to discuss next steps.

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