Participant Diversification

[khn]

Is there a problem if an employer forwards only to participants who are invested 100% in a stable value fund educational material on diversification? I know there is sometimes a fine line between education and advice but i'm thinking this falls under targeted education. One of our clients wants to contact those participants and let them know that that the company wanted to forward this specific info to them to make them aware that there were other options to help them diversify. Is this ok?

[GMK]

I suggest sending it to all participants, ...

unless somehow you know that the others are perfectly diversified for their investment goals, time to retirement, risk aversion, etc.

Some people decide not to risk what they have, and that's their choice. Sometimes it's a temporary shelter in a volatile market. Sometimes, it's just their approach to investing.

There's no problem with educating them about diversification, but don't try to convince only one group. Who's to say that such education isn't also valuable to the participant who is 100% invested in a small cap value fund or who has no large cap exposure. And who's to say that diversification in the plan is necessary if we don't know what investments they have outside the plan.