Frequently Asked Questions

1. What exactly do you mean by “best practices”?
-- Do you have a formal Investment Committee that meets quarterly to review funds and manage costs?
-- Do you use a prudent expert to assist your investment committee make these decisions?
-- Does your prudent expert get paid by the plan (commissions)?
-- Does your broker report to the committee and get paid commissions on his/her fund recommendations? -- (Alert! No Self Dealing – Conflict of Interest and potential breach)
-- Have you established a Charter and does the prudent expert deliver annual report to Board of Directors versus Investment Committee?
-- Do you adhere to the Investment Policy Statement and the criteria to measure and benchmark your current fund line-up?
-- Do you use an IPS to make your fund changes and recommendations?
-- Do you know the real and total costs internalized within the plan?
-- Are these costs reasonable and is there opportunity to lower such costs?
-- Do you know what the cost is on a per participant level?
-- What is the plan’s participation level and what resources do employees have to manage their savings?
-- What are your annual communication goals and campaigns?
Bottom line: By formalizing your fiduciary process you protect yourself from being judged solely on the results of the funds but rather on the process itself.  (You can’t control the markets, but you can control your due diligence and your fiduciary process)

2. Who designates Best practices on a 401k Plan?
The Uniform Fiduciary Standards of Care are designed for the fiduciary to follow a prident process and various authorities provide guidlines for such fiduciaries to follow.

ERISA, DOL, UPIA, and MPERS, CA State Constitution

3. Scope of Services
-- Investment Consulting
-- Compliance and Fiduciary Consulting
-- Education and Communication
-- Benchmarking and Cost Renegotiation with Vendors and Administrators
-- RFP Process and Management

4. Avoid Conflicts of Interest
401K Ventor (TPS) is NOT the Fiduciary of the actual plan.
457/401k/403b Provider Administrator
Broker/Advisor non-fiduciary

5. What is a Fiduciary?
An individual, corporation or association holding assets for another party, often with the legal authority and duty to make decisions regarding financial matters on behalf of the other party.

6. What is an advisor/Consultant?
Signed in writing as Fiduciary of Plan
Any party that receives commissions off a plan is not a fiduciary and should not be providing advice on funds to the selection committee as this is a direct conflict of interest.

Investment Evaluation Methodology

Qualitative Critera

  • change in fund philosophy
  • change in fund manager
  • high individual holding concentrations
  • high portfolio turnover
  • median market capitalization
  • low asset base
  • average credit quality for bond funds

Quantitative criteria

  • Performance - trailing returns vs.rolling returns
  • risk-adjusted performance - sharpe ratio vs. information ratio
  • Up/Down capture ratio
  • Style consistency
  • Cost

 

 

What We Offer

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Provide full cost analysis and fiduciary overview of your current plan and practices.

Helping you lower your liability and have a full understanding of the underlying costs within your plan.

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What They Say

"We are most impressed with the level of service, prompt response, and the ongoing improvements our plan has undergone since we hired Fiduciary Experts. Maribel is like a member of our team"

-Cordoba Corporation

Quick Contact

Would you like more information?

Address: 29250 Wrangler Dr, Murrieta, CA 92563
Toll Free: 888.544.4015
Phone: 951.256.6015
FAX: 888.668.4015

Email: mari@401kfe.com
Participant Service Line: 1-888-544-4015
Twitter: @401kServiceLine