ranger3484

I'm one of the newer Delta pilots that's been on property for about a year now. About a month ago I got a solicitation letter from Delta endorsed Financial Engines to manage my 401k. After looking at the prelminary information I thought it sounded like a good plan and decided to turn over management of my 401k to Financial Engines.

Last week I recieved the Financial Engines Welcome Package along with a review of my 401k, strategies, and Financial Engines' managment plan. I read through the first several pages before I noticed something that caught my attention. In the package it stated that as a participant in the Financial Engines Personal Asset Managment Plan (for which I had signed up), they do not allow one to have more than 20% of their portfolio in any individual stock.

Since I've only been with Delta a year and was prior military, my 401k is brand new. That said, on March 6 when the pilot group got our stock, my 401k was significantly boosted overnight. Within 24hrs my account grew 10 fold with 90% of it in Delta stock.

I called Financial Engines to inform them of this and what exactly it meant with respect to their 20% cap in any individual stock. The short answer is, they will immediately start selling off your Delta stock to bring you down to or below the 20% cap.

I'm no financial expert but if you have little or nothing in your 401k prior to your shares award and you are a Financial Engines member know that they, as your manager, will start selling off your stock in an attempt to have your portfolio 20% or less in any individual stock within the next 4-6 months. Personally, I think our stock is still way undervalued and I don't want to get rid of it quite yet. The only way I could hold on to it (according to the Financial Engines Rep) was to disenroll from the program. That's exactly what I did.

I certainly believe in investment diversity but in my opinion, now is not the time to dump your stock.

For what it's worth.

aircraftdriver

You should run your own retirement and not leave it to these Charlatans. At least, you should do what the poster did and watch his money and then make an "executive" decision. Most people deposit money, file statement, then complain they lost money X years later.

capncrunch

Thanks for the heads up.

acl65pilot

They warned you about this. If you do not want it sold you need to tell them that.

slinky

Great post dude, thanks for letting guys/gals know about this....

I was not going to use them myself....I can **** away my own retirement

Slinky

ranger3484

You can't even tell them that you'd like to keep it. If you have over 20%, they'll start selling. The only way to preserve your shares is to disenroll alltogether.

tsquare

I just got a mailing from these people the other day, and they had already "analyzed" my portfolio. I am very concerned about that since I would think that MY 401k is PRIVATE INFORMATION. I fully intend on calling DAL about this, and if I find out how these folks got this information, I will pass it along.

jtf560

So are Delta shares more undervalued than the vast majority of stocks out there? Everything is low right now. While I probably wouldn't trust the planners to run the show, I would still strongly suggest more diversity. It is always possible that Delta goes up significantly, but it is also very possible the airline industry gets worse than the rest of the market in general and you take a bigger hit than is necessary if you keep your portfolio so concentrated. Unless you've got some good inside info, I'd bet that just about every financial planner would suggest a much more diverse portfolio.

tsquare

Is that a Financial Engines policy or is that a 401k requirement? I called my guy and told him to not sell any of the DAL stock, and he said no problem. (I have been here awhile though, so it doesn't make 20% in my case) PM me if you are interested in another manager, and I'll tell you about my guy. Hint: It isn't a guy that flies for a living.

Zoot Suit

I would never have 90% of my 401K in one stock, especially if it is an airline stock. Does Enron ring a bell? But if as you say this is a brand new 401K and you received a large amount of Delta stock make sure that your future purchases in your 401K are anything BUT Delta stock.