Tu Bui • Pleasanton, CA
Transamerica Financial Advisors, Inc.
I am an advocate of active money management for all of my clients. It is frustrating that strategies for portfolio risk management are mostly absent from many of my clients’ 401(k) plans. Wherever possible, I am trying to get more of my clients involved with active management of their 401(k) plans. This can basically go in one of two different directions.
First is the option—now found in many 401(k)s—for a brokerage account. Based on a client’s specific risk profile, third-party managers can make specific recommendations as to asset allocation. Sometimes, depending on the account’s restrictions, this can be fully handed over to a third-party active money manager for their discretionary portfolio management.
Other times, the plan participant has to make adjustments based on recommendations. In either case, this is far more preferable to not having any real portfolio management and leaving it up to the participant’s own analysis and decision-making.
Second, I have been working on developing my own 401(k) business, essentially taking over existing smaller plans and placing them with one of the open-architecture third-party administrators. In this model, active money managers can be incorporated directly as one of the investment options for participants. From my perspective, this is the ideal solution.
One of the plans I have done this for recently involves a medical practice. The same due diligence in selecting third-party active managers and the same emphasis on risk management applies not only for the physicians but for all of the staff. The doctors who own the practice are very thankful that their staff has the ability to take advantage of the expertise of a professional money manager.
It is really rewarding to me that everyone, no matter how much they make or contribute, has the same opportunity to grow and protect their money over time.
Disclosure: Tu Bui is a registered representative and an investment advisor representative with Transamerica Financial Advisors, Inc. Securities and investment advisory services offered through Transamerica Financial Advisors, Inc. (TFA), Transamerica Financial Group Division—Member FINRA, SIPC, and registered investment advisor. Non-securities products and services are not offered through TFA. TFG004742-09/14.
Photography by Jack Hutch
