Would you like to talk to a professional about your 401k options?
The truth is, there’s nothing stopping you from discussing your 401k investment options with a professional. There is no regulatory authority that says you can’t do it. There is no law that says you can’t. And there’s nothing in your 401k plan that says you can’t do it.
The one question that may be foremost on your mind is: How do I pay for this service? Now here it gets interesting. You can pay for this service yourself from your taxable account—in other words, money that isn’t in a retirement savings account. Why would you want to do that? Well, any fees you pay should be deductible on your tax return in the year you paid them. Check with your tax accountant. Also, if you pay directly from your 401k with tax-free dollars, these funds will not be available to grow tax-free in the account.
Yes, you can pay for professional investment advice directly from your 401k account ~ in theory. I don’t think you’ll find anything in your plan that specifically prohibits it. You may be surprised to find that your plan, revised as a result of the Pension Protection Act of 2006, actually has a process in place to make paying these fees easier. This makes sense from the point of view that you have been paying fees from this account all along. Surprised? It is true. If you have money invested in any mutual fund or target date fund in your account, you have paid the asset managers’ fees directly from the fund. It’s just not transparent, in other words; They never sent you an invoice. They just calculated your fee and deducted it.
That said, without a specific provision in your plan for paying advisory fees directly from your plan assets, your company and Plan Provider are likely to strongly resist allowing you to do so. This, on one level, is understandable. His immediate concern is that you are not associating yourself with a rogue character. Your second concern is that if you and your advisor exploit the account, you may be tempted to take them to court on the grounds that they should never have let you do what you did.