PowerMy401k Promises 3.32% Better Returns — Here's What They're Not Telling You

I heard an ad the other day for a service called PowerMy401k. The pitch was compelling: hand your 401(k) over to "real advisors" who will manage it "in real time," and you'll earn 3.32% higher returns per year.

3.32% annually. Compounded over 20 years. That's life-changing money.

So I did what any reasonable person would do: I looked up the research they cited.

And that's when things got interesting.

The Study Behind the Claim

PowerMy401k is a new service from Bison Wealth, a Registered Investment Advisor firm. Their marketing cites a study by Aon Hewitt and Financial Engines claiming that 401(k) participants who use "professional help" earn 3.32% higher median annual returns than those who manage their own portfolios.

That sounds definitive. But let's dig into what the study actually measured.

Problem #1: The Study Is 14 Years Old

The Aon Hewitt/Financial Engines study was published in 2014, using data from 2006-2012. That's not just old — it's from a completely different investment landscape. Before the low-cost index fund revolution really took hold. Before target-date funds became the default in most 401(k) plans.

Citing 2006-2012 data to sell a 2026 product is like using flip phone sales data to predict smartphone trends.

Problem #2: "Help" Didn't Mean Active Management

Here's the part the marketing leaves out: the study defined "Help" broadly. It included:

• Managed accounts (what Bison is selling)
• Target-date funds (set-it-and-forget-it, ultra-low-cost)
• Online advice tools (questionnaires that suggest allocations)

The 3.32% outperformance wasn't specific to active management by human advisors. It applied to anyone using any form of guidance — including people who just picked a target-date fund and never touched it again.

Problem #3: It Measured Behavior, Not Skill

The study didn't prove that active managers are smarter than index funds. It proved that DIY investors in the sample were making classic mistakes:

• Wrong asset allocation (100% stocks at age 60, or 100% bonds at age 30)
• Panic selling during market downturns
• Chasing hot funds after they'd already peaked
• Ignoring rebalancing for years

The "professional help" group simply avoided these mistakes. That's not alpha — that's basic behavioral guardrails.

You don't need to pay 1% annually for someone to stop you from panic-selling. A target-date fund does that for 0.10%.

Problem #4: Who Funded the Study?

The study was co-authored by Financial Engines — one of the largest managed account providers in the country (now part of Edelman Financial Engines).

This doesn't make the research fraudulent. But it does mean the entity selling managed accounts was also the entity measuring whether managed accounts work. That's worth noting.

The Fee Problem Nobody Mentions

Let's talk about what "professional management" actually costs.

RIAs typically charge between 0.5% and 1.5% of assets under management annually. Let's be generous and assume the service charges 0.75%.

On a $200,000 401(k), that's:

Time Period	Cumulative Fees Paid
Year 1	$1,500
Year 5	$8,200
Year 10	$18,400
Year 20	$45,000+

Now subtract that from the promised 3.32% annual outperformance.

At 0.75% in fees, your net "outperformance" drops to 2.57%. At 1%, it's 2.32%. At 1.25%, you're down to 2.07%.

And remember — that 3.32% figure was comparing professionally-helped investors to behaviorally-challenged DIYers who were panic-selling and chasing returns. If you're a calm, disciplined investor using low-cost index funds, the comparison doesn't apply to you.

What the Actual Research Shows

Let's look at what independent research says about active management:

Morningstar's Active/Passive Barometer: Across nearly all fund categories, low-cost index funds outperform the majority of active funds over 10+ year periods.

The Arithmetic of Active Management (William Sharpe, Nobel Laureate): Before costs, active and passive investors must, in aggregate, earn the same returns. After costs, active investors as a group must underperform. It's mathematical certainty.

The idea that "real advisors" trading your 401(k) "in real time" will outperform a simple target-date fund runs counter to decades of evidence.

The "Not AI" Marketing Angle

Bison's marketing makes a point of saying their service uses "real advisors, not AI investment agents."

This is positioning against robo-advisors like Betterment and Wealthfront, which charge around 0.25% for automated portfolio management.

So the service is charging 3-4x more than a robo-advisor... for what, exactly?

• "Human judgment" that statistically underperforms index funds?
• "Real-time" trading that increases transaction costs and tax drag?
• The comfort of knowing a person (not a computer) is underperforming?

There's nothing wrong with preferring human advice. Some people genuinely value that relationship. But if the pitch is "we'll beat the market," the data doesn't support it.

What Actually Works

If you're a 401(k) participant who wants solid results without paying ongoing management fees, the research points to simpler solutions:

Target-date funds: Pick the one closest to your retirement year. Contribute consistently. Don't touch it. The fund automatically rebalances and becomes more conservative as you age. Expense ratios are often 0.10-0.15%.

A simple three-fund portfolio: If your 401(k) has good low-cost index options (total US stock, total international, total bond), split your allocation based on your risk tolerance and rebalance once a year.

Avoid behavioral mistakes: The real enemy isn't "not enough professional management" — it's panic-selling during downturns, chasing performance, and checking your balance too often. A boring, automated approach beats "active management" for most people.

The Bottom Line

Services like this aren't scams. They're legitimate RIAs offering a real service. Some people genuinely prefer having a human manage their investments, and that's a valid choice.

But the marketing claim — that professional management delivers 3.32% higher returns — deserves scrutiny:

• The study is 14 years old
• It measured "any form of help," not active management specifically
• It compared guided investors to behaviorally-challenged DIYers
• It was funded by an industry player
• After fees, the "outperformance" shrinks significantly
• Decades of independent research show active management underperforms

If you're a disciplined investor using low-cost index funds or target-date funds, you probably don't need someone trading your 401(k) "in real time."

What you might need is clarity on whether your current allocation makes sense. Whether your fund expense ratios are reasonable. Whether you're on track for your goals.

That's a one-time analysis — not an ongoing fee.