fi360 Webinar Recording: The Combined Effects of the DOL’s Proposed Advice Regulation and 408(b)(2)

CEFEX and fi360 sponsored attorney Fred Reish to provide a thorough overview of the proposed advice and 408(b)(2) regulations. If you are a plan fiduciary who has hired a person or firm to provide your employees advice on their 401k, or an advisor/broker that works with 401k participants, this is essentially a must-listen event. The following were a number of interesting points which affect plan sponsors and advisors:

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5 Participant Success Features to Add to Your 401k Plan

Last month, we brought on a new client that was going through a provider change. During our interaction with their employees, we were shocked to find what their old 401k provider DIDN’T offer compared with what their new provider DID. For the sake of full disclosure, we tend to be a little naive in assuming that certain features are a given when it comes to the capabilities of 401k provider websites. That being said, it’s 2011. I can order a burrito from my phone. Thus, if your provider offers any of these functions, the following are some basic online tools (in our naive minds) that we have found participants enjoy, and quite frankly expect in today’s digital age:

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Survey Demonstrates Better Results for 401k Participants Using Advice

A recent study illustrated finds that 401k participants using advice are better diversified and have larger balances. Here are some interesting findings of the survey:

Improved Diversification – Participants held 74% more funds in their portfolio (8.67 versus 4.98 funds)
Improved Performance – 3 Year Annualized Return was 2.67% better than do-it-yourself investors
Larger Balances Seek Advice – Average balance of participants using advice was $107,558 versus $44,178 of do-it-yourself investors
These results are very similar to our experience with 401k investors. We find that participants using advice (or managed accounts) are better diversified and experience better downside protection due to improved risk management. Additionally, the larger the balance, the more likely the participant is to seek advice.

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2011 IRS Contributions Limits for Your 401k/403b

Last week, the IRS released the contribution limits for 401k/403b investors, and the amounts remain unchanged for 2011. Here are the numbers:

Elective Deferral (traditional limits) – $16,500
Catch-up Contribution for Investors 50 yrs and Older – $5,500
The reality is, your contributions to your 401k/403b is the #1 reason for your success as an investor. Here are some strategies for increasing your contributions:

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Final Regulation on 401(k) Advice Bill Due Early 2011

Even though it has been in the works for over four years now, it looks like we might finally receive clarification on the PPA ‘Fiduciary Adviser’ 401(k) advice regulations early next year. Understandably, with the many issues that have garnered more press such as the healthcare debate, 401(k) fee disclosure and target date funds, the regulations have been delayed.

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(Podcast) 401(k) Participant Advice Best Practices on Talk 401(k) with Don Davidson

I was fortunate enough to be interviewed by Don Davidson of Manarin Investment Counsel for his Talk 401(k) podcast. While Don does an excellent job with this, I cannot say the same for myself. Therefore, if you are willing to overlook my stammerings (I was surprisingly nervous), the information might be helpful to you. Some of the topics included in the conversation include:

What is the difference between advice and guidance?
What is the liability for employers to provide advice to their participants?
The PPA Level Fee requirement
Why advice needs to be ongoing
Advice v. managed accounts
Technology and its impact on participant engagement

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It’s Official – We Are Finally

Here’s a suggestion to businesses…get your business name correct from the get go. Just sayin’. Rebranding is a big job, even for small businesses such as us. That being said, the transition is complete as we have finished the migration to (we think, anyway). Any links you have bookmarked should still come to our site or the appropriate file. We apologize if you have experienced any confusion or issues over the past few weeks.

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401(k) Fiduciary Best Practices Available on Your iPod

I am an iPod junkie. I admit it. However, I did not take advantage of the vast library of information available in the Podcast section of iTunes until just lately.

I was recently made aware of Don Davidson’s new “Talk 401k” podcast, and decided to take a listen. After hearing his first podcast with Tom Kmak of Fiduciary Benchmarks, I was sold. The 20 minute interview was concise and informative. I don’t know about you, but when I can listen in and take a break from having to read everything on 401(k) fiduciary best practices, it’s quite nice. I would highly recommend subscribing and listening in when you have a chance.

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A Conversation on 401(k) Advice vs. Guidance – PPA Fiduciary Adviser v. The DoL 96-1 Opinion

When marketing our services to companies sponsoring 401(k) plans, we will often face confusion as to what is truly being offered to participants, guidance or advice. The reason being that the word advice has been used liberally by brokers, advisors, and service providers. Unfortunately, that will sometimes lead to companies assuming their participants are receiving the advice they need, rather than knowing what is actually taking place in those education meetings and any 1on1 interactions that follow. The guidance versus advice being so unclear, that the following is a mock conversation designed to educate plan sponsors and advisors as to what is and isn’t, should and shouldn’t, be taking place with participants so to protect the plan sponsor from fiduciary liability:

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