According to a new report from Aon Hewitt and Financial Engines, 401(k) participants who use employer-provided investment help outperform those who do not take advantage of help tools. The disparity between workers using help and those who do not have been magnified during volatile markets. The report, Help in Defined Contribution Plans: 2006 through 2010, examined the impact of professional investment help—target-date funds, managed accounts, and online advice (“Help”)—in eight large employer-sponsored defined contribution plans, representing more than 400,000 individual participants with $25 billion in plan assets. Aon Hewitt and Financial Engines were able to measure how participant behavior affected portfolio risk and returns between January 1, 2006 and December 31, 2010—one of the most volatile periods in the stock market’s history. 1 The study found that workers who used Help between 2006 and 2010 experienced annual returns nearly 3 percent higher (292 basis points, net of fees) than those individuals managing their 401(k)s on their own. Over time, the advantages of using Help can add up. For example, a 45-year old participant using Help and investing $10,000 could have 70 percent more wealth ($71,400) at age 65 compared to a similar participant managing their portfolio on their own ($42,100), according to Aon Hewitt/Financial Engines’ projections. “This research shows the concrete value of professional retirement Help during a variety of market conditions, and across age groups. Those 401(k) participants who get help with their portfolios outperformed those handling their accounts on their own,” explained Christopher Jones, chief investment officer at Financial Engines. “The Help that employers have made available is having the desired effect of keeping participants in diversified portfolios and avoiding costly mistakes.” Poor portfolio diversification and inappropriate risk choices contributed to the widening performance gap between participants using professional Help and those not using Help, particularly in 2009. Additionally, some participants also reacted to the market volatility, moving to cash or bonds, and then missed out on the market rally in 2009. Overall, 38 percent of non-Help participants have risk levels that are excessive, and 18 percent have risk levels that are too low. In contrast, participants using professional help maintained more diversified allocations with appropriate risk levels, and also employed a rebalancing strategy.