401kActiveWatch at a Glance
The Role of 401kActiveWatch with your Retirement Plan.
See how 401kActiveWatch fits into the narrative of the ever changing retirement plan environment.
A message from Our Director of Retirement Plans
• The enactment of the DOL Fiduciary Rule (Conflicts of Interest Rule); will cause a “sea change” in how your 401k and 403b plan will be served. This rule puts brokers and their Broker Dealers now in the same fiduciary boat as Plan Sponsors.
• Already, some Broker Dealers like State Farm, MetLife, and Allstate have pulled out with instructed their representatives to stop serving 401k or 403b plans. We expect a number of 401k and 403b providers to follow suite.
• Our Fiduciary Advisors have always operated under the Fiduciary Standard by acting solely in the bests interests of their clients. In fact, they take an oath to that effect.
• Every plan and every participant served by our Fiduciary Advisors is also supported by our “Team of Experts”. So, your plan is being served by dedicated team able to address your specific needs.
Thank you for your consideration.
Director of Retirement Plans
Our Shared Primary Duty as Plan Fiduciaries.
• To act solely in the best interests of plan participants and their beneficiaries.
• To make sure all plan expenses are justified and reasonable for the services being rendered.
• To have a documented process for the decisions made for the plan.
• To ensure that the qualified retirement plan is in compliance with current regulations.
Two Key Fiduciary Roles We Offer to Mitigate your Fiduciary Duty.
• Fiduciary Advisors as defined under the Pension Protection Act to provide plan participants with investment advice at the worksite.
• Section 3(38) Investment Manager serving as a discretionary manager responsible for the plan’s investments.
All of us have some form of irrational investor behavior.
According to many studies, including the DALBAR Investor Irrational Behavior, participants need and are better off with having a professional money manager – especially those near retirement. They want someone to tell them how and where to invest their contributions, and/or the employer match. Due to their emotions, they want someone to tell them when to be in and out of the market.
The Benefit with having a Fiduciary Advisor.
• Most plan participants want face-to-face access to investment professional with whom they know must act in their best interests and can freely discuss their individual/family investment needs and goals.
• Many participants fear making investment decisions that could jeopardize their retirement savings. The advice of fiduciary advisor can help alleviate some of these fears.
• Financial Wellness of employees is now the fastest growing employee benefit.
The Benefit of 3(38) Fiduciary Investment Manager.
• A 3(21) investment fiduciary is a paid professional who provides investment recommendations to the plan sponsor/trustee. The plan sponsor/trustee retains ultimate decision-making authority for the investments and may accept or reject the recommendations. Both share the fiduciary responsibility.
• By properly appointing and monitoring an authorized 3(38) Investment Manager, a plan sponsor/trustee is relieved of all fiduciary responsibility for the investment decisions made by the Registered Investment Advisor.
Why would we accept the liability as Fiduciary Advisors?
• Our role as Fiduciary Advisors carries the same liability and fiduciary standard we accept as fee-based Investment Advisor Representatives (IAR) under our RIA. However, we realized and know that an ERISA fiduciary comes with a higher “Standard of Care” under the law.
• This is why we require our IARs to receive training and earn designations such as an Accredited Investment Fiduciary (AIF) or a certification as Registered Fiduciary (RF).
Why would we accept the fiduciary liability as 3(38) Investment Manager?
• We accept this liability due to nature of our AlphaSolution Investment Models.
• Each of the AlphaSolution Models we make available to Qualified Retirement Plans have the following characteristics:
– They are “Fact Based” meaning no assumptions.
– They are “Rules Driven” govern by strict guidelines.
– Every Model has built-in “Downside Risk Controls” to minimize market risk.
• The AlphaSolution Momentum Models also qualify as Qualified Default Investment Alternative (QDIA)
401kActiveWatch was designed to help Plan Sponsors with mitigating their fiduciary liability and managing their fiduciary duty through a Team of Experts.
• Provide Participants with personal Investment Advice given by a Fiduciary Advisor who is credential to provide this advice under ERISA.
• Accept the role as 3(38) Investment Manager to take on the liability for investment losses to the plan.
• We also offer a full menu of pick and chose services to fit the specific needs of your plan. To learn more about us and our services, we encourage you to review our website.
The following is an article by Sr. Consultant on the definition of a fiduciary advisor. It is important to realize that this definition comes straight from the pension protection act of 2006.
There are four main roles in unbundled retirement plans: the advisor, an investment manager, a record keeper, and a third party administrator. The graphic below demonstrates each role and their responsibilities in relation to the plan sponsor.
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