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The Ask: In order to create a nice proposal for a prospect, you need to make sure it includes all the best investment options. On the one hand, they should be good in terms of fees and performance, which might interest a plan sponsor, and they should correspond to your provider platform requirements, on the other hand. The Problem: By default, when you select any 401(k) or 403(b) plan from the Plan Screener, the system will use these basic assumptions for optimization: All provided funds are based on the Open Architecture, which is the whole universe of funds, and it’s not the best option if you have a specific list...

Daniel Satchkov

27 Feb 2019

Case Study: How to Identify High Net Worth Leads in Your Area

Our client has a broad list of potential prospects available to search from through our Prospects of Wealth 2.0 database, but they want to be able to narrow down this massive list into a more refined list. For example, they specifically may want to offer their services to prospects with a large amount of savings that are approaching retirement soon.

Daniel Satchkov

27 Feb 2019

Fidelity is facing more litigation from plan participants

While we’ve been talking about new lawsuits coming out every day, just yesterday InvestmentNews.com reported that Fidelity is facing more litigation from plan participants, this time for the T-Mobile 401(k) plan. The plaintiff is alleging that Fidelity was charging “secret” fees to participants on their mutual funds. For example, if the 12b-1 or revenue sharing fees on the funds were below a certain threshold, Fidelity would take an additional payment from the fund to make up for this lost compensation. One of the big problems of this is that these payments (indirect compensation) were not being properly reported or disclosed. While Fidelity claims that they were complying with all reporting...

Daniel Satchkov

27 Feb 2019

3 Updates on Current Fiduciary Lawsuits

We often talk about living in a “fiduciary era”, and new lawsuits are still a big part of it. Plan sponsors are facing lawsuits for excessive fees, poor performing funds, and a lack of looking out for participants’ best interest. Here are a few examples we’ve noticed of the continuing trend: Setting Precedent The fiduciary lawsuits will be an ongoing process between collective participants and fiduciaries. There will be winners and losers on both sides of the argument. However, one thing is certain, it will not stop. With so much of awareness about the fiduciary responsibilities, the participants in the 401(k) plans will be scrutinizing their plans for possible flaws...

Daniel Satchkov

27 Feb 2019

Active vs ETFs: Do active funds give you what you pay for?

Most fund managers justify the higher fees associated with the fund by explaining that their skill will allow them to deliver better results than the index. We have taken a unique perspective to examine this argument. Our approach is based around our fee-saving software which allows retirement plan advisors to identify cheaper but similar funds to those existing funds in a plan menu or portfolio. The unique thing about this approach is that we aren’t looking for similar funds by asset class but rather by a quantitative correlation. One common example which we notice in existing plan menus is that a plan may have an expensive active fund but the...