Brokers, bankers and agents are prohibited from providing investment advice. Doing so puts a tremendous liability on the backs of employer/plan sponsors. Namely it creates a conflict of interest with the employer and the plan’s participant/employees, and is a disqualifiable event under Title 1 of ERISA. In addition, it puts a huge liability onto the registered rep’s employer.

The 401k Advisory Group, Inc. is independently owned and operated. We can be officially designated as a “Third Party Investment Fiduciary” or Investment Manager to your retirement plan (Title 1, Section 3(38) of ERISA). We can reduce the employer’s exposure to liability with regard to the investments within their Qualified plan.

Our role as your "ERISA Investment Fiduciary" is two-fold: one is with you, the plan sponsor, and the other is with your employee/participants.

Our role here is to provide full investment advisory service to you in the selection, monitoring and oversight of the fund menu within your plan.
(To reiterate what was mentioned above, service providers, that is, the 401k vendors, along with the registered sales reps at the broker/dealers, banks, mutual fund companies and insurance companies are PROHIBITED by their employers from providing 'suggested' fund menus as this puts them in the position of being a fiduciary to your plan, which is something they do NOT want.) This is a critical role, where we provide an objective second set of eyes to your plan investments, and make recommendations accordingly. According to ERISA, this action by The 401k Advisory Group takes the liability away from the plan sponsor and places it with The 401k Advisory Group.

The plan sponsor needs to make sure we are doing our job. That process has been automated through the following procedures:

First, if it has not been established already, we strenuously advise the creation of an "Investment subcommittee", of whom will be a select group of individuals, preferably those who will also be serving on the larger "Retirement Plan Committee". We will report, on a regular and 'as needed' basis, to this committee.

Next, if it has not been created, we will create a customized "Statement of Investment Policy", which will be the guidelines for which the Investment Committee will adhere. Such things as overall philosophy and strategy of the fund menu, then down to tactical responses to certain occurrances, such as the selection of any of a myriad of exit strategies for funds that fall through a certain number of threshholds.

Finally, we create the "Fiduciary Audit File", which will include documentation, from employee communications (in your attempt to satisfy 404(c)), to your due diligence reviews of the fund options to the due diligence reviews of the service providers.

For your employee/participants:

Since we are in the unique position as your fiduciary, we can also provide full investment advice to your participants — NOT generic, unfulfilling (and boring) enrollment meetings. We utilize the latest in financial planning techniques, utilizing our own retirement planning software to craft customized retirement planning strategies with each of your employees. We take into account age, desired retirement age, marital status, current balance, current deferral percentage (if with a 401k plan), and the current asset allocation model. We test each employee with a brief quiz to learn of their investment knowledge and risk tolerance profile as well. This helps is to create a tempered strategy, based on this profile and what their calculated retirement needs analysis reflects.

Ongoing review will occur annually with each of your employees.

NOTE: WE WILL NEVER USE THIS INFORMATION FOR ANY OTHER PURPOSES TO "CROSS-SELL" YOUR EMPLOYEES OTHER INVESTMENTS. While brokerages train their sales reps this practice, we feel it is inappropriate, and also a waste of your employee time/resource to hear sales pitches while on duty/on site. IF ANY BUSINESS IS CONDUCTED WITH ANY OF YOUR EMPLOYEES: we will contact the employer of the circumstance, and ask permission to conduct this business OUTSIDE of normal business hours AND OFF-SITE.