Study Shows 401(k) Participants Feel Naïve About Investing: Participants also Skeptical of Internet-Based Advice and Social Security

401(k) advice leader reports the results from their latest survey on participant investment attitudes and behaviors.

Annapolis, MD (PRWEB) November 30, 2006 -- Apparently Enron, WorldCom, and pro-longed market/economic volatility have done little to encourage 401(k) participants to become more educated and astute about their savings plan and the factors that affect it. One thing is evident; however, people are more apprehensive than ever about the viability of internet-based 401(k) advice for their retirement plan.

The 2006 401(k) Participant Survey - conducted by The Scarborough Group, Inc. in Annapolis, MD - asked 664 plan participants around the country a series of questions regarding forms of 401(k) advice, investment behavior, and levels of confidence in current and future legislative initiatives.

The survey revealed that 90% of all respondents have been naïve about investing, whether that naïveté has been constant or sporadic. On a positive note, however, is that these same participants are not over-confident in their investing abilities (73%). "Too often people mistake information for knowledge," said J. Michael Scarborough, president of The Scarborough Group. "It is refreshing to see that people, despite the amount of information that is available through the media, are not too confident in their abilities. Too often a false sense of confidence tends to lead to foolish investing mistakes."

The survey also revealed that 72% of participants would prefer to use personal management for their 401(k) plan, meaning a live advisor provides guidance for your retirement plan and also manages the assets within it. Conversely, only 20% of participants said they would prefer an internet-based form of advice. Interestingly, though, is that only 4% of participants said they would trust advice generated from an internet-based application (this number is down from 5% in 2001).

"For too many Americans, the 401(k) is the cornerstone of retirement. It is too important to retirement for people to trust electronic advice. People need the reassurance from real professionals", said Scarborough.

With regard to Social Security people across the board are worried about its viability for the long-term. 75% of those surveyed say they are "somewhat" or "very" concerned. Only 8% say they are "somewhat" unconcerned or "not at all" concerned. "What makes this interesting is 57% of those surveyed are 51 years old or older. Obviously a significant number of those people who are at, or close to, retirement age are concerned about Social Security. This could lead to irrational investing behavior if these folks are not careful," insisted Scarborough.

Members of the media are invited to secure a copy of the 2006 401(k) Participant Survey Report, or can arrange interviews with J. Michael Scarborough, by contacting Benjamin Lewis of Perception, Inc. at 301-963-7555 or benjamin.lewis@perceptiononline.com.

ABOUT THE SCARBOROUGH GROUP, INC.
The Scarborough Group, Inc., provides personal, unbiased, and professional investment advice and allocation management for employees participating in a company-sponsored 401(k) savings plan. The Scarborough Group's flat-fee business model has helped establish it as one of the nation's premier providers of allocation management for 401(k) participants. The Scarborough Group is a registered investment adviser with the Securities and Exchange Commission (SEC).

For more information visit www.401kadvice.com.