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Recall that a good Investment Menu under 404(c) is the one that helps “minimize risk of the overall portfolio and minimize risk of large losses”. According to Modern Portfolio Theory (a theory featured prominently in ERISA law cases), there are essentially two criteria that the Investment Menu needs to satisfy to enable participants to minimize risk of large losses. The first is that menu choices need to have different risk levels, from low to high. The second is that correlation between menu choices cannot be close to 1. For each of these two criteria there is a special report in 401kFiduciaryOptimizer that shows how well the plan fares. Criteria 1:...

Daniel Satchkov

03 Jul 2018

Read about Prospects of Wealth 2.0 in “The Latest In Financial Advisor #FinTech for July 2018”

The latest article by renowned advisor expert Michael Kitces on FinTech trends titled The Latest In Financial Advisor #FinTech for the month of July 2018, talks about the latest 2-in-1 tool for financial advisors from Larkspur-Rixtrema: “…RiXtrema, a portfolio stress testing tool that has increasingly focused into the 401(k) space by building out a “401(k) Fiduciary Optimizer” due diligence tool, is now also building out its own version of marketing and prospecting tools. Leveraging a database of qualified plan executives from their recent Larkspur acquisition, RiXtrema has announced its “Prospects Of Wealth 2.0” platform, which pulls available information on the qualified plan’s 401(k) menu, conducts a “Portfolio Crash Test” scenario analysis to show...

Daniel Satchkov

02 Jul 2018

Top 5 Larkspur-Rixtrema Blog Posts for June 2018

5. Top 5 Larkspur-Rixtrema Blog Posts for June 2018. An Exclusive Case Study from Larkspur-Rixtrema. Lets examine one of the plans from the 401kFiduciaryOptimizer tool.…Continue Reading 4. The Key Benefits of 401kFiduciaryOptimizer. The thing that most financial advisors struggle with is differentiating themselves from the competition. The analysis provided by the 401k Fiduciary Optimizer is uniquely compelling and really sets you apart from the crowd…Continue Reading 3. Advantages of Stress Testing vs. Traditional Risk Measures. Portfolio Stress Testing is a useful method for determining how a portfolio will fare during periods of financial crises. The financial crises scenarios are modeled and may include historical events (e.g. 2008-like scenario)...

Daniel Satchkov

02 Jul 2018

Here’s What People Are Saying About State Fiduciary Rules

It’s been a while since the battle between federal fiduciary rule advocates and the financial services industry started. The U.S. Department of Labor rule is designed to oblige financial advisors to act in the best interest of clients when providing advice on investments in retirement plans. But it is an open question whether the rule has a future or not. President Trump has ordered a new analysis of the rule focused on its relevance, and The U.S. Court of Appeals for the Fifth Circuit voted to bring down the DOL rule in March (a decision that was not appealed by the DOL), while the U.S. Securities and Exchange Commission is...

Daniel Satchkov

28 Jun 2018

Q&A: 403(b) Plans and Puerto Rico

Q. Our current pre-approved 403(b) plan does not exclude residents of Puerto Rico, but our PPA defined contribution plan does. Does the Puerto Rican tax code provide for 403(b) plans? Do we exclude them in a U.S. based 403b plan based on the U.S. tax code? But if we do, do we violate universal availability by writing in the exclusion? A. First there is not a good answer for this! For the elective deferral piece, you are correct — you would have to include residents of Puerto Rico, since these employees are not considered NRAs for retirement plan coverage rules. Employers have, in fact, written amendments to their 403(b) plans...