Wall Streeters lose $2 billion in 401(k) bet on own firms

The basic tenet of investing is diversification, but financial advisors on Wall Street don’t seem to be following it. According to annual filings, workers at the five largest Wall Street banks saw the value of company stock in their 401(k) accounts decline more than $2 billion in 2011. “You’re already relying on that company for your job, your income, benefits and everything else,” said Chris Baker, co-founder of Oaktree Financial Advisors Inc. “It can magnify the impact on your personal finances if your portfolio takes a beating and your employer isn’t doing well.” Morgan Stanley employees who receive company shares to match 401(k) contributions lost $570 million; Bank of America employees lost $1.37 billion. Workers at JPMorgan Chase & Co. and Citigroup Inc. also lost hundreds of millions of dollars.