401(k) investors may be using a robo-advisor — and not even know it

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Americans saving in a 401(ok) plan may have cash stashed in a robo-advisor — and they may not even know it.

Robo-advice is principally skilled cash administration guided by an algorithm (a robotic, so to talk), largely permitting investors to be hands-off.

Companies providing a retirement profit are more and more enrolling staff into 401(ok) plans mechanically. Most are diverted to some kind of robo-advisor.

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About 60% of 401(ok) plans used auto-enrollment in 2019, up from 42% a decade earlier, in line with the Plan Sponsor Council of America. Doing so helps overcome inertia that may forestall a particular person from saving.

“You get the momentum going,” Keith Gredys, chairman and CEO of The Kidder Company in Clive, Iowa, who works with 401(ok) plans and investors, mentioned of automated enrollment. “[Employees] go in and tend not to come out.”

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