The size and viability of the 401k rollover market is as confusing as ever, especially considering the on-again/off-again (and on-again and off-again and …) fiduciary rule.
Has it dampened the enthusiasm for rolling assets to an IRA upon retirement? Are advisors as enthusiastic as they once were for the potential new source of business income? Should the assets now simply be left in the 401k plan for greater efficiencies and breakpoints?
All important questions, and automated financial account firm FeeX is looking to help answer at least a few.
On Tuesday FeeX, founded by Uri Levine of popular traffic app Waze fame, released FeeX for Advisors, which automatically analyzes fees involved in potential 401k rollovers and IRA transfers.
The 404a5 participant fee disclosure document is referenced by the DOL in the Fiduciary rule as the document required for a diligent and prudent analysis. The rule specifically highlights retirement plan distributions such as a 401k rollover or IRA transfer.
According to the company, FeeX automatically collects and analyzes the 404a5 disclosure document as one of its main data sources and runs a detailed analysis on an investor’s existing account, taking into consideration the investor’s specific plan and holdings.
“This type of detailed analysis could take a veteran advisor days to complete,” FeeX claims. “The platform allows for a side-by-side comparison of fees, features, past returns and asset allocation against a model portfolio or personalized portfolio. It can be white labeled and deployed in a matter of minutes.”
“The DOL rule specifically outlines a prudent process to be followed by financial advisors, but the definition of prudent has changed,” said Yoav Zurel, CEO of FeeX. “The process begins with a detailed and accurate analysis of an investor’s current account, which calls for documents that are often times hard to find and even harder to digest and analyze. These documents can be up to 150 pages long and in various formats which can take hours upon hours of reading, analyzing and cross-referencing.”
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.
