Skip to Content

Is the Conventional Wisdom About Lineup Size Still Correct?

A new Morningstar paper questions the status quo.

A fascinating new paper by Morningstar's head of retirement research, David Blanchett, along with Professor Michael Finke, upends conventional wisdom on how retirement plan menus should be structured, but it also offers some useful insights about the behavior and performance of individual investors in those retirement plans that we can all take some lessons from.

As I noted in my very first column looking at how many funds one really needs in a portfolio, experts have generally advised against creating retirement-plan lineups and individual portfolios overloaded with too many funds. A number of reasons underlie that advice, but one of the chief rationales (particularly for retirement plans) is that too many options leads to "choice overload." That's the situation in which participants, overwhelmed with the number of options before them, decide to take the route of doling out their allocations equally across all the plan options--or worse, to not participate in the plan at all.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.