Reish & Reicher Investment Manager Adviser Report October 2009

datePosted on 15:56, January 15th, 2010 by ARidgway

AD, Yes, If you read the Fred Reish article, Fred list four (4) primary tools to mitigate risk for investment related losses in participant accounts: #1 QDIA, #2 Participant investment advice, #3 404(c) compliance, and #4 Section 3(38) advisor. 401k SAFE covers all that Fred Reish mentions above. For example: We have Stadion taking care of #1 & #2. We are in compliance with #3 by the processes we have in place and with Ibbotson, we have the 3(38) investment advisor role covered. In addition, amsource is a full scope 3(21) advisor that has delegated the investment monitoring process to the 3(38) advisor. Hope this helps!

Alan Ridgway
Senior Partner
amsource 401k SAFE
1608 13th Avenue South
Suite 200
Birmingham, AL 35205
1-888-401k-SAFE (1.888.401.5723)
Cell: 205.914.8412

From: AD Financial Advisor, AIF
Sent: Wednesday, January 13, 2010 10:03 AM
To: Alan Ridgway
Subject: Follow up Question re 401k SAFE

Alan, I wanted to follow up on a specific question. Will 401k SAFE take on serving as the fiduciary under section 3(38) of ERISA and state that in writing?

Group Retirement Plans

Working Smart!

datePosted on 21:16, January 14th, 2010 by lee

Working Smart!

One of our partners shared that he was helping a new advisor understand the value of using 401k Safe in his marketing efforts to gain new fee based clients. First he told him that if he called a hundred prospects marketing fee based planning he would most likely get one new client, he then went on to explain that he would easily triple that number leading with 401kSafe.

First, employers with in excess of a hundred employees usually have an in house CFO that is dealing with a 401k annual plan audit. The CFO already has an appreciation of the administrative burdens and it’s not a difficult conversation to bring him up to speed on the fiduciary liabilities they face as plan sponsors. (See CFO Magazine link on partner portal). In many cases CFO’s are open to a new solution that solves both the administrative and fiduciary challenges of maintaining a 401(k) plan.

Once a plan is sold the advisor will begin to develop a relationship while reviewing plan options as well as understanding the details of ownership and affiliated entities in completing the adoption agreement. The 401kSafe on boarding process sets the stage for developing a deeper relationship with high net worth clients.

Innovation makes the world go round!!

This is unfortunately not uncommon, but it’s usually related to a termination. This is the first time I have seen this relating to a 401(k) plan, but it doesn’t surprise me.

Over the last 18 months we have seen spike in employee calls requesting loans and hardships. We have full time associates that take pride in being courteous, respectful, and timely when employees need assistance. Over the past 20 years we have learned from working with clients in our HR outsourcing business the importance of working to minimize conflict, especially when dealing with terminations and other sensitive issues like denying a hardship request.

Unfortunately, some employees will remain irate regardless of how the situation is handled. Associates should be sensitive to distinguish between employee that is upset vs. irate or threatening. When the latter occurs employers should have a plan of action to maximize the security of their associates.

I would like to think that these tragedies could be avoided if best practices where followed, but realize that in some cases people just unexpectedly go off the deep end. My thoughts and prayers are with these people, what a waste..

New 401(k) regulations could prompt more advisers to move toward flat fees

datePosted on 16:52, January 6th, 2010 by lee

The article states:

“Industry experts expect that regulations on 401(k) plan fee disclosure and investment advice will be finalized this year and that their implementation will prompt a wave of financial advisers to exit the market.”

I am not sure I buy the part about advisors exiting the market at least not voluntarily. Advisors that inform their clients that as plan sponsors it is their fiduciary duty to know what they are paying in fees and to take steps to insure it is reasonable will thrive. The advisor’s that fail to inform their clients of their fiduciary duties as plan sponsors will lose both credibility and business. Market share will shift to the former.

2010- Innovate!

datePosted on 09:55, December 31st, 2009 by lee

The world has changed. There is nothing like the threat of losing market share, profits, and credit to spark innovation. If success breeds complacency, crisis breeds innovation.

In the January issue of Harvard Business Review they list the “Ten Breakthrough Ideas for 2010.” Number one on the list is “What really motivates workers.” It’s not “recognition, incentives, or clear goals” as the majority of managers thought, it’s “Progress.” People take pride in getting better; “meaningful accomplishment.”

What does this have to do with your employer clients that offer 401(k) plans? Unless your client is providing 401(k) services to their clients it’s not “progress” it’s administration.

Management teams have a renewed since of focus on driving innovations that lead to better products and services at lower costs. Partnering with other firms to increase time spent focusing on innovations that increase production efficiencies and service is a strategy that all successful companies will aggressively execute.

We hope you will join us in 2010 in offering employers a 401(k) solution that not only keeps your clients Safe, but also increases the most valuable resource a company has, TIME to focus on innovation!

Call us at 1-888-401k-SAFE or register at our partner portal.

Lee Lichtenstein

Walmart case gets a second look.

Employers with over 100 employees have CFO’s and we have found majority of them read articles in CFO magazine. In December publication they list “four 401 (k) trends to watch.” The last trend listed is “Fiduciary Liability.”

Interesting Conversation

datePosted on 12:19, December 18th, 2009 by lee

Reminds us that CFO/CEO is in loop on signing routine documents. Easy to see how litigation can arise from administration.

See “limiting liability”

Our latest Observations from the Field

datePosted on 13:52, December 11th, 2009 by jsharp

Alan and I have spent the last couple of weeks meeting with advisors in Minneapolis, Philadelphia, Cleveland and Birmingham talking about 401k SAFE. We’ve covered a lot of ground, seen a lot of Starbucks, and made a few observations that I would like to share with you:

1) 401k SAFE is an incredible opportunity for you to grow your business. Alan and I both came away with an even stronger conviction that 401k SAFE is a significant differentiator in the retirement plan market, and an incredible opportunity for you to bring value to both existing and prospective clients. You can further instill your position as a trusted advisors by 1) educating plans sponsors who are uninformed about their fiduciary liability, or 2) providing plan sponsors who are looking for answers, a comprehensive solution they have not seen from anyone else. You don’t have to know all of the details of ERISA to be effective selling this solution. Let us help you! We can educate your prospect about their fiduciary responsibilities and what is happening that would impact them as a fiduciary today.

2) Many of you haven’t called on companies with a 100 or more employees. There aren’t many advisors who have targeted the 100+ market, and if this is you, don’t let that be an intimidation to keep you from starting in 2010. This market is not simply our sweet spot because of our services, it is our sweet spot because it truly is where the greatest need, and the greatest opportunity is for you as an advisor to help mitigate fiduciary liability.

These employers “get it”. They are in some cases drowning in servicing plan provisions, attempting to address their fiduciary responsibilities, and dealing with the hard dollar costs of a plan audit and recordkeeping. Many have gone direct to a “1-800 401(k) shop” believing they will get similar service at a reduced cost, only to discover they were wrong on both counts. As their advisor, you can bring them something they have sorely missed; a personal contact, a financial planning resource for owners and participants, and a value-driven, not a price-driven solution. Needless to say for you as an advisor, the extended value of a client with 100 or more employees for rollovers, and financial planning is substantial.

3) You view large employer retirement plans as complicated to setup and demanding to maintain. In a traditional sense this may be true, but with 401k SAFE you won’t have that burden. As a multiple employer plan (MEP), 401k SAFE substantially reduces the paperwork on the front-end (adoption), and keeps you out of the ongoing administration and servicing.

You can scale your business without adding demands on your schedule, or adding resources to support. You will have to work with the client on the front-end to obtain the plan documents we need to conduct our due diligence. This can take time, and may require several calls on your part to the client to complete, but the trade-off is minimal paperwork and involvement from you to adopt and start the plan.

You will be responsible for scheduling and conducting the enrollment meetings. If you are new to retirement plans, and specifically 401(k)’s, let us know, we can help coordinate some support.

I’m sure I could add a couple of more “take-aways,” but I will save those until later. As we all reflect on the year that was 2009 and look towards 2010, hopefully 401k SAFE will be a catalyst for making 2010 your best year ever in the financial services business!

All the best!