Countless Choices, Participant Direction and Mutual Funds

The 401K industry is structured almost universally around mutual funds (and insurance company products that look like funds). Clearly the industry has been shaped and grown by the fund industry (and some might say for the fund industry). The problem with this is that it runs contrary to human nature and common sense. People don’t like countless choices and they don’t like building their own investment portfolios. All the while, a multitude of RIA firms, running smaller accounts and niche ideas, have been shut out because the industry is structured for funds. If you are a plan sponsor/trustee, imagine instead that you are placing $5 million of your own money. Would you be content with a static ensemble of 25 mutual funds? You direct your own show? With minimal or no guidance?

Simple idea – Practically Nonexistent Anywhere Else

We have spent years trying to break through the mutual fund wall. We even engaged data base engineers to design a different solution. However, thanks to new technology, we have found third party providers who can structure managed portfolios inside 401K plans. You, the plan sponsor/trustee, can select a private advisory firm, or firms, based on superior performance, risk management, track record, etc. just as though you were placing $5 million or more of your own money. Your participants will be able to choose simple combinations of these; presented in terms that make sense to them, such as aggressive, moderate and conservative. And it can all be provided seamlessly, as though the program existed for one person instead of hundreds. A few exciting portfolios instead of dozens of funds. We’ll work with you to provide a solution that you and your plan participants feel really good about. Simple idea – practically nonexistent anywhere else.

Making it a Perfect Plan

When you hire an advisor to manage your hard earned money, you want lots of clear communication, including periodic visits. This is not likely to be happening with your current plan because the industry believes a good plan begins and ends with capturing your plan assets. What we have found is that a perfect plan begins with managed portfolios and then thrives with communication and periodic visits. Your company will love that and appreciate your good judgment.

Transparency, Conflicts of Interest and Fees

The 401K industry has grown to trillions of dollars over nearly 30 years. During that time, many plans have fed many mouths and lined many pockets. The gameplan has been to lock up assets in off-the-shelf turnkey plans featuring heavy fee structures. Mutual funds and brokerage houses commonly bury fees and then promise to share those fees with other players, including brokers and plan administrators. Often it isn’t highly visible and often it is excessive. As sponsor, you need providers who will disclose every fee and deliver investment portfolios that are both lean and high performance. Just as if it were your own money.