Fee-Based and Flat-Fee - a better way to 401(k)
Independent and objective retirement plan consulting
Part of Fintegra Financial Solutions

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SPECIAL BULLETIN:
NEW DOL FEE DISCLOSURE RULES FOR 401(K)s

New regulations mean plan sponsors will have to be more accountable.

401(k) plan sponsors will need to become 401(k) plan analysts. The Department of Labor is implementing new regulations for 401(k)s this year to address some longstanding issues. The intention is to make indirect plan costs visible and leave plan participants better informed.

Beginning April 1, the DOL is requiring 401(k) plan sponsors to disclose fees and expenses related to the operation of the 401(k) to all plan participants. Specifically, the expense ratios of the funds within the plan must be disclosed, along with the amount per $1,000 that it would cost participants to be invested in a particular fund.¹

A 2011 AARP survey found that 62% of 401(k) participants didn’t know how much they were paying in fees, demonstrating that this move may be long overdue.¹

As a plan sponsor, the new regulations will impact you in three ways:

You now have to assume greater degrees of vigilance and diligence.
You will have a new obligation to gauge the acceptability of the plan vendor’s fees and costs.
It will be wise to take a “total systems” view of your 401(k) and test it periodically to check that the “end users” are being well-served by the plan vendor’s offering.²

As a plan fiduciary, you will have three ongoing duties. These duties are required by the new DOL 408(b)(2) regulation. Periodically, you must:

Check to see that the plan vendor has sent you suitable fee and expense disclosures. (This should be routine.)
Review these disclosures to make sure they conform to federal law. (Are you receiving sufficient information on fees and plan costs?)
Audit the plan with the input of an independent consultant to see if the fees are fair. (Is the existing service arrangement reasonable or are plan participants getting gouged?)

In previous years, plan sponsors routinely delegated these tasks. No more. If you fail to do this, it could constitute a breach of fiduciary responsibility.²

The new rules - 408(b)(2) and 404(a)(5) – come out of concern that plan vendors may obscure avenues of indirect compensation as they communicate with plan sponsors.²

How can you step up and meet these new responsibilities? Employers will now have to look at their 401(k)s from a holistic perspective. It could be illuminating; it could be dismaying, as some businesses may learn that a plan vendor with whom they have had a long relationship has been less than forthcoming about certain fees and other factors.

It is the right time to ask for help? An experienced, independent retirement plan consultant can help you with an annual audit of the 401(k) fees and expenses, and contribute insights to help you meet these challenges and obligations with knowledge and confidence.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or a recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 - blogs.smartmoney.com/encore/2012/01/06/3-retirement-trends-for-2012/ [1/6/12]

2 - www.rolandcriss.com/news/RolandCriss-Fee_Disclosure_WP_Part_I.pdf [2/2/12]

Welcome to Fee-Based 401(k)!

Our business model started as a simple question: If Fee-Based Financial Planners are so objective and good, why aren't there Fee-Based retirement plan consultants? Now there are.

The term "Fee-Based" simply means that you can rely on the objective guidance of your chosen professional. You arrange to compensate only for a set menu of services and they promise you that they're not getting paid on the side to sell you what you don't want.

Read what Forbes had to say on the subject in their March 15, 2012 article 401(k) Outsourcing: The Next Big Thing.

Have you found yourself wondering how much your providers and advisers are getting paid? We bet you'll have a difficult time figuring it out. Yet, at the same time Fee Transparency is being promoted heavily this year; in our humble opinion, it's for good reason! Money is often silently diverted for a broad array of charges that you may not be aware of.

Have you changed providers recently? The chances are good that you and your co-workers footed the bill for a big up-front commission paid to the advisor. And who else is getting paid out of your retirement account? If it were easy to figure out, the new Fee Transparency Rules likely wouldn't be rolling out this year with such media fanfare.

With us, you won't have to wonder.

At Fee-Based 401(k), we have no affiliations. We do not work for a Bank, Trust Company, CPA, Third-Party Administrator, Law Firm, Investment Firm, Insurance Company, or anyone else interested in selling you a product or service. Put simply: we work solely as consultants on your plan, helping to protect your company's employees as well as the company. We do this through our Service Agreement pledge, which outlines exactly what you can expect from us, as well as when and how often you can expect to see us. We help you build and manage a relevant Fiduciary Process and manage the details. We negotiate all fees as low as possible, collect and report detail Fee & Expense Reports so you don't have to, and then work as your plan's champions to keep them low.

Fee-Based 401(k) does not replace your existing plan. We are completely neutral when it comes to your providers.  We simply aid in the ongoing administration of your plan, regardless of who your plan providers are, so that you can focus on other tasks.

                Call today for a Free Consultation: 877-875-4616
                   (or continue reading to learn more about us)

What to expect from Fee-Based 401(k)...

Let's start with an analogy: imagine the last time you purchased a car. Better yet, imagine everyone in your office buying a car at the same time. Now imagine that the salesperson also makes money on the gas you buy to fill your tank. Will that salesperson sell you the fuel efficient model? Probably not. It gets even better... now imagine that the dealership gets kickbacks from different car manufacturers. Is the salesperson going to find the least expensive, most suitable car, with the best gas mileage? Doubtful.

At Fee-Based 401(k), we believe in a flat-fee premise. Instead of layers of burried, trickle-down fees and murky services, consider brining us to the table. Allow us to take some of the administrative burden off your back (or the collective backs of your HR Department) and arrange a fair, flat fee for our services. (That's where the "Fee Based" part comes from.) Once that's done, and we're sitting squarly in your corner, we'll negotiate aggressively on your behalf, helping you to impliment the best plan(s) for your group, manage it, and understand who's getting paid, for what services, and how much.

We'll handle the Fiduciary Process and keep your plan running smoothly. (See Our Commitment To You below.)  We've been doing it, across the country, since 2003. So stop allowing salespeople to hide true compensation under ambiguous nomenclature like "12b-1 fees", and get away from "advisers" who broker your plan simply to sell other investments to the owners and employees. Do you have a "milk carton broker"? Fire them.

Through our staunch independence, Fee-Based 401(k) has removed virtually all conflicts of interest. Ever wonder why some 401(k) salesmen recommend one fund or investment over another, why they seem to only recommend one provider, or why some plans have Money Markets while others have "Guaranteed Investment Contracts"? Often, it comes down to the salesman's compensation, which is all too often dictated by firms selling their products through your plan.

We're not paid based on the investments - remember, we've already negotiated a flat fee with you. We then become much more your truth-seeking advocates, relentlessly negotiating plan fees.

Proudly Independent: we're not part of any bank, insurance company, accounting firm, legal practice, trust company or anyone else that has a product to sell you. Pure and simple: we are objective retirement plan consultants.

It all boils down to this: know what you own, who you're paying, and how much it costs you.

Oh, and we're also "Fee-Only" advisors. Don't worry, we'll help you decide what's best for your plan in clear and easy to understand language.

Every member of our team has tremendous experience with plan education, which means your employees will enjoy hearing from us. We want to positively impact participant outcomes!

                Call today for a Free Consultation: 877-875-4616

Our Commitment To You:

We will act as co-fiduciary on your plan, providing you another degree of protection in the event of audit or litigation.
We will provide you with a Service Commitment Agreement - an outline of exactly what to expect from us, and when to expect it.
We will tailor and impliment a proven, actionable fiduciary process - so you can focus on more profitable things... like your bottom line.
We will help you create and manage an Investment Policy Statement, which clearly defines systems, policies, and practices.
We will build and manage a custom Fiduciary Review Binder with 8 tabs of insightful, up-to-date information on your plan. It's a great tool to have when questions arise about your plan.

Investment and insurance products offered through Fintegra LLC, an independent registered broker/dealer, Member FINRA/SIPC, and SEC registered investment advisor. OSJ phone number 440.229.5280. Investment and insurance products are not FDIC insured, are not bank deposits, are not insured by any government agency or financial institution, and may lose value. This is not an offer of solicitation in states that I am currently not licensed. I am currently licensed to conduct business in the following states: AL, CA, FL, IN, KS, MA, NY, OH, PA, SC, TX

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