Advisors Earn Substantial Referral Fees--Effortlessly!
ADVISORS: EFFORTLESSLY EARN A 20% REFERRAL FEE!
Do you know a small business looking for a new or replacement 401k? Our new referral program rebates 20% to your referral, and pays a 20% referral fee to you!
Simply make a referral to 401k Easy using the form below. If your referral signs with us, they will earn a 30% rebate from the first year’s annual fee, and we will also pay you the exact amount of the rebate as a referral fee.
For example, if you refer a small business to us that buys a 401k plan with an annual cost of $1495, the business gets a 20% rebate of $299, and you earn a $299 referral fee. The larger the company you refer to us, the larger your referral fee will be.
If you have a referral to recommend to us, please provide email contact information below, or have ask your referral to submit an online 401k Easy order form from this website.
All our communications with your referral will be logged and tracked, and you will be kept informed of their progress from referral to actual 401k Easy client.
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Advisors and ERISA
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.
Unitized Managed Accounts (UMA) for RIA-Developed Custom Portfolios
(Note: You must be a Registered Investment Advisor (RIA) to use this option, and in addition be a active client of our 401k Enginuity wholesale 401k 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' 401k 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 401k plan.
Unitized Managed Accounts give Registered Investment Advisors a wider range of options for their 401k 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 401k participants can self-direct their personal 401k investments. Historically this type of offering was only available to the mid-to-large 401k plan market. Now small plans can afford to take advantage of this service, at competitive prices. There at two basic UMA configurations available to 401k 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 401k 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