A new digital offering aims to make life (and business) easier for 401k advisors who work with small businesses.
The platform from 401kplans.com uses technology to “bring process, efficiency and transparency to financial advisors who work on small business retirement plans.”
The technology is configurable and can include specific 401k providers, approved investment options, 3(21)/3(38) fiduciary programs, as well as dashboards of reporting and analytics for enhanced oversight.
“Within a few short minutes,” the financial advisor can complete a documented eight-step due diligence process. The advisor can download and update publicly available information for a plan. Then, based on available data, calculate the point in time current total cost of the plan and determine the allocation of the assets by fund category.
The system will then automatically compare the total cost of the plan to a “reasonable range” of a transparent benchmark average based on the actual plan data and market-based pricing.
“In the small plan market, it is estimated that greater than 80 percent of transactions are completed by ‘generalist’ financial advisors who may not have the expertise, tools or capacity to follow a prudent process where anything more than total cost is measured”, Scott Buffington, CEO of 401kplans.com, said in a statement. “Retirement specialist financial advisors have the knowledge but may not have the capacity to spend the hours needed to complete a proper due diligence process for a small plan. We will also provide access to TPAs’, as they play such a valuable role supporting advisors and providing guidance to plan sponsors.”
Providers that are a good fit for the client will be identified and a customized due diligence document is created which would include the broker-dealers required compliance language and disclosures. Following presentations from the retirement wholesalers, the financial advisor can select the winning provider right on the App and expedite the transition process to the new Provider.
Access to the app will be offered to financial advisors by invitation from the investment managers, 401k providers and TPA’s that participate on the platform.
A financial advisor may also request access to an account directly on www.401kplans.com.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
