Financial powerhouses across the nation are jockeying for position to serve millions of workers who don't have the time — or don't want to make time — to manage their...

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SAN JOSE, Calif. — Financial powerhouses across the nation are jockeying for position to serve millions of workers who don’t have the time — or don’t want to make time — to manage their 401(k) retirement accounts wisely.

This legion of “reluctant” or “disengaged” 401(k) savers represent one-third to one-half of the 48 million workers who have 401(k)s or similar retirement accounts. They’ve saved $3 trillion in their accounts yet show little or no interest in growing their holdings for profit.

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The marketing blitz to reach potential customers has accelerated from mutual-fund titans Fidelity Investments and Vanguard, brokerage and insurance giants like Merrill Lynch and Manulife, as well as smaller investment advisers such as Morningstar.

The latest race is to roll out “managed accounts.” For a fee, 401(k) savers can have their accounts run by investment professionals who make all the decisions. But vendors also are peddling one-size-fits-many mutual funds that invest money based on a worker’s age or tolerance for risky markets.

The vendors are also offering a third option: personalized investment advice that workers can execute with a mouse click or a phone call.

Industry insiders have high hopes and expectations for such products.

A Vanguard boss said such services could “fundamentally change the face of retirement.” A Fidelity executive figures success is a “slam dunk.” And Morningstar’s CEO predicts 2004 will be remembered as the “launching-pad” year.

Or will it?

For the services to take off, the financial-services industry must close two sales pitches.

First, vendors must coax hundreds of thousands of employers to upgrade 401(k) plans — a bureaucratic process that can drag on six to 18 months at big companies that employ three out of four 401(k) savers, said Glenn Ezard, a senior consultant in Segal Advisors’ pension-advisory arm. That’s where most of the action — or inaction — is today.

Then comes the tougher job: selling the idea to millions of individual workers who are paralyzed by inertia and tune out when investment decisions arise.

History shows that even though they crave help and pledge to sign up, most won’t follow through.

“This is work,” said Jin-Chul Kim, a senior analyst with Financial Insights near Boston. “You don’t just build it and assume they will come.”

The challenge of selling the idea twice — first to employers, then to workers — is evident in data from a survey released in October by the Profit Sharing/401(k) Council of America.

“This is the typical pattern: You see a significant jump initially, then it slows down and is more gradual,” said President David Wray.

It’s not easy to sell employers on investment hand-holding services for a variety of reasons.

Some worry workers might sue if their investments sour. Some want to see results at other companies first.

But often the problem is top bosses have higher priorities, like surviving the recession and turning profits.

At JCPenney, 401(k) improvements took a back seat to a management overhaul. Even so, the Texas-based retailing giant is a pioneer among big employers with a 401(k).

Of its 110,000 eligible workers, an estimated 60 percent are “reluctant” investors, said retirement-plan manager John Walton. The retailer is trying just about everything to induce workers to save more and spread their money beyond conservative interest-bearing accounts (41 percent of the workers’ savings) and J.C. Penney stock (37 percent).

For several years, it has offered personalized advice from Financial Engines, based in Palo Alto, Calif., and a handful of lifestyle funds. Starting in September, workers can opt for managed accounts from Financial Engines.

“It’s going to take some time to get the ball rolling,” Walton said. “But I think in four to five years, we’ll see Penney’s was on the front edge of one of best things to happen to 401(k) plans.”

But history shows workers don’t always take advantage of hand-holding they say they crave. The reasons are many.

Some have little inkling how lifestyle funds work and don’t know how to single out one from the 17 investment options in the typical 401(k). As for advice, it’s criticized for being too complex for novices yet too simplistic for motivated do-it-yourselfers.

And some worry that fees for managed accounts are too high.

The biggest hurdle, however, is conquering indifference and ignorance. Unless companies dramatically improve how they teach workers about their 401(k) investment options, acceptance of these hand-holding services will rely significantly on word of mouth around the water cooler.