401(k) Advisors Use Low - Cost 401(k) Easy for Their Small Business Clients

401(k) Advisors use 401(k) Easy for their small business clients

401(k) Easy provides financial advisors with a valuable real-time "link" with plan sponsors and plan participants. As an advisor, you have an up-to-the-minute detailed view of all your clients' plans and monitor their participants' retirement holdings. The Advisor Gateway allows essential 401(k) accounting, testing and reporting functions but cannot initiate transactions via.

Please click the image on right to see the Financial Advisor Gateway. This is a live demo, with updated and current mutual fund prices. This Gateway gives financial advisors a solid “hands-on” experience of how robust and well-organized 401(k) Easy really is. Most plans can be fully administered in only 10 minutes a month...or less. The financial advisor gets an excellent “birds-eye” view of all Plan Participants' past and current investments and balances, and can also monitor the operations performed by the Plan Sponsor.   financial advisor gateway

401(k) Easy Global Audit Log ...

The Global Audit Log maintains a record of ALL activity performed throughout the system, including activities at the general system administration level.

Advisor can search for information by client, plan, date range, plan administrator, participant, and/or transaction type.

401(k) Easy Plan Testing & Reports ...

The Advisor can run the following tests and reports for any number of plans at will:

ACP Test-Section 401(m)
ADP Test-Section 401(k)
Calendar Year Deferral Limit Test-402(g)
Compensation Nondiscrimination
Maximum Annual Additions Test-415 (c)
Ratio Percentage Test
Top Heavy Test- Section 416

Age 50 Report
Balance Less Than $5000
Deferral Change Summary Report
Distribution Activity Summary
Investment Elections Report
Loans-Activity Summary
Loans-Delinquent Loans
Loans-New Loan Summary
Participant Address Report
Participant Allocation Report
Participant Contribution Summary
Participant Hours & Compensation Summary
Participant Statements
Participant Synoptic Report
Participant Vesting Detail
Participant Vesting Summary
Participation Allocation Summary
Required Minimum Distributions

401k Advisors and ERISA -- Q & A concerning 401k advisors' fiduciary responsibilities

The following is a summary, in question and answer form, of the Department of Labor's position regarding financial advisory services rendered to 401(k) pension plans. These guidelines can change without notice, so it is important to review them with your legal council before relying upon them:

Is it legal to provide investment advice services or portfolio management services, or both, to ERISA plan participants?

Yes. In fact, the U.S. Department of Labor is on record saying that it wants participants to have as much assistance as possible, and that it encourages plan sponsors to offer participants investment advice if plan sponsors determine their participants need it to make informed decisions. In addition, the DOL, Congress and the Administration have increasingly voiced strong support of investment advice for participants.

Portfolio management services have been used in ERISA plans for many years. ERISA includes provisions for plan sponsors to appoint investment managers, and the Department of Labor regulations on 404(c) plans discuss various examples involving investment management services.

Would doing nothing, in other words, not providing these services to participants, be safer from a legal perspective?

Not really. We think that providing advice and/or portfolio management can actually reduce your risk as a plan sponsor. Employees who make uninformed decisions about savings and investing are less likely to be prepared for their retirements. By making advice and/or portfolio management available, you ensure that your employees have access to the help and information they need to plan for their futures, decreasing the chances of dissatisfaction and possible litigation.

Furthermore, if you as a plan sponsor/fiduciary know that the participants in your plan need help with investing for retirement, you should provide the needed help, whether it is education, advice, professional management, or all three. This is supported by ERISA section 404(a)(1)(B), which requires that all plan fiduciaries exercise their responsibilities "with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims." (Emphasis added.)

What is the Department of Labor's view on providing advice and/or portfolio management?

The Department of Labor has stated that providing advice can actually reduce a sponsor's fiduciary risk. In a major policy speech on September 15, 2000, Leslie Kramerich, Acting Assistant Secretary of Labor, Pension and Welfare Benefits Administration had this to say on the subject:

"[W]e believe that employers can be responsive to the investment education and investment advice needs of their employees, without significant burdens or risk of liability. The selection of providers that offer informed, unbiased and appropriate investment education or investment advice will, in our view, not only serve to increase the likelihood of employees achieving retirement security, but also significantly reduce the potential for employee dissatisfaction and possible litigation."

Is providing investment education a sufficient way to fulfill my role as a fiduciary?

Informed policymakers caution that relying on education alone is no longer enough. According to DOL's current Assistant Secretary, "[m]eaningful comprehensive investment advice is more important now than it has ever been" and "[i]nvestment education, while important, is simply not enough." Assistant Secretary Ann L. Combs delivered this message to Congress on July 17, 2001 in connection with testimony on the subject of "Retirement Security Advice Legislation" to the Subcommittee on Employer-Employee Relations of the House Committee on Education and the Workforce.

401k Unitized Managed Accounts (UMA) for RIA - Developed Custom Portfolios

Now You Can Offer Your Investment Expertise to Your 401(k) Clients !

(Note: You must be a Registered Investment Advisor (RIA) to use this option, and in addition be a active client of our 401(k) Enginuity wholesale 401(k) platform, described at www.401kenginuity.com. TD Ameritrade offers a UMA service for a fee described below, and is our preferred broker/asset custodian for UMA accounts.)

Today many Registered Investment Advisors (RIA) want to use their investing knowledge and expertise to offer custom portfolios to their clients' 401(k) plans. A Unitized Managed Account (UMA) is the way this gets accomplished efficiently and affordably. Essentially the RIA used a UMA to create a private 'mutual fund' for the client's plan; shares of this private 'mutual fund' trade like any other mutual fund shares within the 401(k) plan.

Unitized Managed Accounts give Registered Investment Advisors a wider range of options for their 401(k) plan sponsor- clients, at a very competitive price, and with full fee disclosure. The UMA, managed online by the RIA, is a pooled account that may include publicly traded stocks, bonds and exchange traded funds, as well as mutual funds. The typical UMA portfolio accounting system calculates the account's precise unit price each night based on the total market value of the underlying securities held in the pool. UMAs are then “unitized” on a daily basis, and settled in a T + O environment. This creates a true daily environment, so that 401(k) participants can self-direct their personal 401(k) investments. Historically this type of offering was only available to the mid-to-large 401(k) plan market. Now small plans can afford to take advantage of this service, at competitive prices. There at two basic UMA configurations available to 401(k) plans:

Configuration I: RIA-Managed Portfolio Using Mutual Funds Only

A Registered Investment Advisor (RIA) works with the Employer-Plan Sponsor to determine the investment objective for each UMA portfolio. The RIA designs the UMA portfolios, which can range from asset allocations such as conservative to aggressive, or balanced to age-targeted. The RIA actively manages the underlying assets in the UMA, and places the mutual fund trades through a web-based trading platform. In addition to providing the platform for the RIA to manage the portfolio, the UMA provider settles the trades placed by the 401(k) plan participants to buy, sell or exchange the UMA assets for other investment options in the plan. Specifics:

*Accommodates mutual funds only

*UMA is actively managed by the RIA

*Approximate $1,500 annual fee paid to UMA provider for each portfolio

Configuration II: RIA-Managed Portfolio Using Multiple Asset Classes

An RIA works with the Employer-Plan Sponsor to determine the investment objective for each portfolio, and sets a specific target asset allocation model for each portfolio. The portfolio can be comprised of a variety of assets: mutual funds, publicly-traded stocks and exchange traded funds. This configuration includes portfolios consisting of a cash component for liquidity, and employer stock (including privately held employer stock, under certain conditions) to provide plan participants with T+O trade settlement in an employer stock investment option. The UMA portfolio may be re-balanced back to the targeted asset allocation model each time there is participant activity, or on a schedule as determined by the RIA/Employer. Specifics:

*UMA can accommodate a variety of assets and asset types, included listed stocks and mutual funds

*UMA is managed by an independent investment advisor

*UMA-provider executes underlying trades initiated by RIA

*Approximate $2,500 annual fee paid to UMA provider for each 'multiple asset' portfolio