Curiosity and concern over the debt ceiling crisis are heating up the phone banks at the nation’s biggest retirement fund managers, as investors ponder whether moving 401(k) money out of the markets will save them some short-term pain.
Vanguard, Fidelity and TD Ameritrade report higher call volume at their customer service departments, though they describe it as more of a bump than a panicked flood. “About 5% over a month ago,” says Vanguard spokeswoman Linda Wolohan. A Fidelity spokesman said the company is bringing additional representatives on this weekend to handle an expected increase in calls.
With $9.2 trillion held in IRAs and defined contribution plans, it’s no surprise that investors—with memories of the 2008 market crash still fresh—would be skittish about the safety of their retirement plans. But so far at least, few appear to be taking action. Says Brian Lewbart of T. Rowe Price: “At the margins, there are some people making some switches out of equities into cash, while at the same time we’re seeing people buying into the dips. Nothing that suggests people are overreacting to the short-term volatility.” Lewbart, echoing other fund companies, said T. Rowe’s main message to clients remains, “If you’re investing for long-term goals like retirement, don’t get overly concerned about what’s happening in the short term.”
The big retirement companies started preparing to counsel anxious investors early. A task force of TD Ameritrade has been following the issue for some time, preparing reports and Q&A for its clients, says spokeswoman Kim Hillyer.
This includes watching closely changes in how their clients are feeling about investing—Ameritrade’s latest client sentiment survey completed Thursday revealed that more than 40% were pessimistic about the U.S. economy, up more than 46% from May; 39% said today is a worse time to invest than did a year ago. (And by the way, 72% of TD Ameritrade clients reported being “extremely dissatisfied” with Congress’ handling of the debt ceiling issue).
In talking to investors, Hillyer says, the focus is on the investment truisms of diversification and managing risk. She says the company also is recommending investors review their fund prospectuses to make sure they understand their exposure to U.S. government entities and highlighting the importance of holding cash in FDIC-insured accounts.

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