That’s the subject of a recent study by Vanguard Retirement Research, the results of which were that nearly two-thirds of participants adopting a managed account advisory service saw a sharp increase in their equity exposure. Expected returns rose by 82 basis points (after fund expenses but before any managed account fee), while Sharpe ratios improved by 22%.

The January 1, 2007 effective data is fast approaching for the Pension Protection Act provision that provides fiduciary relief to plan sponsors who make investment advice available to 401(k) plan participants. Whether plan sponsors should, however, is a blog post for another day.

In the meantime, here is the link to Vanguard’s study (PDF).

Hat tip to Barry Barnitz’ Financial page.