There's a growing movement in the financial-education profession to persuade employers to provide better financial education and advice to employees, many of whom have to make their own investment decisions for their retirement accounts.

It's a movement I totally endorse.

I certainly could have used better advice from my first employer about how to invest the contributions to my 401(k) plan. I was 22 and didn't have a clue about the stock market. Since the company didn't provide me with much guidance, I turned to a colleague.

Bad move.

The co-worker was in his late forties but he was planning to retire early. He put his money in bond and money-market funds and advised me to do the same. I did what I was told. That was in 1986. I could kick myself.

Since then the stock market has soared, and I missed out on much of those gains. Even if the market hadn't risen so high, I was too conservative at such a young age with the allocation of my retirement funds.

Like millions of other employees, I should have gotten better financial guidance, according to the financial planners, educators and researchers who attended the National Institute for Personal Finance Employee Education's fifth annual conference last week in Roanoke.

Increasingly, companies are shifting workers from defined-benefit plans, which promise specified monthly benefits at retirement, to defined-contribution plans. Defined-contribution plans, such as 401(k)s, do not promise a specific benefit at retirement. Instead, employees have to decide how to invest contributions made into their retirement plans.

Unlike employees with defined-benefit plans, in which their employers have the benefit of legions of experts, workers with 401(k) plans often have only unreadable fact sheets or a dense prospectus to work with. "They just throw information at employees and say, 'Good luck,' " said E. Thomas Garman, executive director of the National Institute for Personal Finance at Virginia Tech.

What little guidance there is doesn't go beyond "start now," "max out," "diversity," and "dollar-cost averaging," according to a recent report by the Certified Financial Planner Board of Standards.

"The education as delivered today is just not enough," said David Bixler, one of the authors of the report and president of Indianapolis-based Capital Strategies Inc., an investment management consulting firm.

The problem is that too many employers cling to the notion that they can't provide financial advice because of guidelines for the Employee Retirement Income Security Act, a federal labor law designed to protect employees in pension and benefit plans.

Company executives argue that, under Labor Department guidelines, if they don't stick to generic financial information when communicating with plan participants they could be sued if the advice they dispense produces bad results.

"I'm very sympathetic to employers who are being cautious," said William J. Arnone, the national director for employee education at Ernst & Young International. "They worry that the advice about a certain asset allocation model will blow up in their face."

I understand the need for companies to be careful. In their effort to be so cautious, however, employers may be putting themselves in legal jeopardy anyway by not doing enough.

"Just think what liability they will have when employees figure out that they could have had more money in retirement if they had gotten better advice," Bixler said. "Companies can give advice. It just can't come from the provider affiliated with the investment options in their corporate plan," meaning that if your company plan uses Vanguard, Vanguard shouldn't be telling you how to invest.

Garman of Virginia Tech said the lack of good financial education and advice could leave workers with a lot less money to live on in retirement.

"On average workers, have $37,000 in their 401(k) plan," he points out. "The median amount is $11,200. And for people 50 to 59--a group that will be retiring soon--the average is $62,000. I'm scared to death for these people."

I'm scared, too, and I'm concerned.

Employees need help. Employers encouraged us to join these defined-contribution plans, and now they're just fine with our picking up information here and there.

Companies have a responsibility to stop whining about what they can't do and find a way to provide better and specific investment and financial-planning advice to their workers. Otherwise, there are going to be a whole of lot of retired folk who will be getting good advice--from class-action lawyers.

Michelle Singletary's column appears in this section every Sunday. While she welcomes comments and column ideas, she cannot offer specific personal financial advice or answer detailed questions about individual situations. Her e-mail address is singletarym@ washpost.com. Readers can write to her at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071.

Advice, Anyone?

John Hancock's annual survey of participants in its defined-contribution plan found a general decline in both investment knowledge and familiarity with investment options. Here are some of the results of the 1999 survey:

* Fifty-six percent of participants in 401(k)-type retirement plans are either unaware of, or ignoring, one of the most basic tenets of long-term investing: asset allocation.

* Only 44 percent of participants have a specific strategy or goal for allocating retirement savings.

* Respondents, on average, think company stock is considerably less risky than a diversified stock fund.

* Nearly 85 percent of respondents do not know that the best time to invest in a bond fund is when interest rates are expected to decrease.

* Only 45 percent of respondents realize it is possible to lose money in a bond fund.

* Only 13 percent of respondents know that money-market funds contain only short-term securities. While 50 percent recognize that money-market funds do contain short-term securities, 41 percent of the participants believe they also include stocks, and 49 percent believe they also include bonds.

* Less than a quarter of respondents consider themselves "knowledgeable" investors. Nearly 40 percent consider themselves to have "low knowledge" about investing.

SOURCE: John Hancock Mutual Life Insurance Co.