Case Study: Create the Ultimate Optimization Report for a Plan Sponsor

The Ask:

In order to create a winning proposal for a prospect, you need to make sure it includes all the best investment options. On the one hand, they should be optimized in terms of fees and performance, which might interest a plan sponsor, and  finally they should correspond your provider platform requirements.

The Problem:

By default, when you select any 401(k) or 403(b) plan from the Plan Screener, the system will use basic assumption for optimization, which are:

1. 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 specific list of funds to choose from;
2. Minimum investment will be enforced, which will not let you use specific funds for smaller investments;
3. Default settings exclude ETF’s, so you’ll need to add them manually to the comparison report;
4. The system disregards better performance assumption for similar funds, which means you’ll get the cheapest funds but they will not necessarily outperform the original funds.
   

The Solution:

It’s well known that Larkspur-RiXtrema’s 401kFiduciaryOptimizer is a very flexible platform, where you can customize your settings at almost any level, in order to provide the best optimization report for a plan sponsor.

Of course, you can customize your settings in the Edit Plan section, but the changes won’t be saved for later, and every time you open another plan, the settings will restore to default. If you’d like to set up your assumptions to be applied to any plan you open in the Plan Screener, you can do it in your account settings.

To do that, you would need to click on icon in the upper-right corner in order to access your account settings:

In your account menu, underneath details and the field for changing your password, you can find your optimization settings:

1. This setting allows you to change Provider List from Open Architecture to any other one, including your custom list of funds if you have uploaded it in the Edit Plan section before;
2. Here you can include ETF’s in the optimization report to check if there are any cheaper exchange traded funds with similar to the original funds history;
3. If you’d like to exclude minimum investment from the comparison, you can do it in the corresponding setting;
4. Count of alternatives on the Low Fee Alternatives page can be reduced here;
5. To restrict any funds that don’t have track record for the past 1, 3, 5, and 10 years, check one (or several) of those boxes;
6. And the most import setting here, if you want only the funds with better performance to be shown in the report, can be found here (please check 1, 3, 5, or 10 years for the corresponding assumption)
   

All settings will be saved automatically and whenever you choose another retirement plan from the Plan Screener or upload your own, they will be applied to the optimization report.