Vetting Advisors

Once the advisor has been selected, Nirenberg’s program ensures a flow of information to plan participants and strives to help them understand the risks and rewards of their investment choices.

Indeed, service providers should live up to their title and serve up a host of helpful services, he says.

“If employees were being paid attention to by service providers, they’d do better in every way. They need to answer questions and educate investors about diversification, for example; what the mutual funds are and what each is about,” says Nirenberg, whose program is implemented by the HR department or supervised by his firm.

“Advisors must provide jargon-free information about investments and should suggest that the company have monthly or bimonthly meetings with employees, where they can get good, down-to-earth information,” according to Nirenberg.

Further, it’s necessary for advisors to inform employees as to the importance of holding a more conservative portfolio as they move closer to retirement. “Employees ought to be able to ask questions about portfolio risk, such as the risk of being overly conservative or overly speculative — and get answers,” he says. And every month or so, investors should be supplied with an analysis of their investments.

“If service providers do this,” he continues, “the [firm] will end up with employees that are much more loyal because they’ll see they [care] about them. And it’s good for the service provider to be complimented about information they’re getting out to employees.”

Born in Brooklyn and reared in Manhattan, Nirenberg is the son of Joan Alison, co-writer of the play (Everybody Comes to Rick’s) upon which famed film Casablanca was based. With a bachelor’s from Dartmouth and a master’s degree from Dartmouth’s Tuck School of Business, he began his career in Dad’s shirt-making business.

But when, he recalls, Far East imports began “knocking the socks off” small U.S. manufacturers, he sought greener pastures. “I looked around for a place where I could make the most money and not have to carry an inventory of shirts. That was the brokerage business — so I went into it.”

In 1966, he started as a broker with L.F. Rothschild, in New York City. By 1983 he was a partner and the sales manager of its largest branch. “I didn’t [make] partner because anybody thought I was smart. Back then, the moment your gross commission exceeded $600,000, you automatically became a partner. So in 1983, I worked like a dog and did as much trading as I possibly could to get me over $600,000,” says Nirenberg, who, as sales manager, supervised the 100-broker Manhattan office.

After leaving Oppenheimer, he opened his own advisory firm, managing money until 1992, at which time he began focusing on the expert witness work he’d started two years earlier.

Certainly, Nirenberg — wed to publishing executive Julie Lewit-Nirenberg, founder of multi-media Eat!Move!Play! fighting childhood obesity — is out to demystify and improve 401(k) plan management. As he sees it, the critical first step is signing up highly competent, competitively priced service providers.