no adviser wanted

[gregburst]

401k prospect wants no financial adviser involved with the plan "to save money."

We could establish a brokerage account for each participant.

Any other ideas or investment companies that might be a good fit?

[StormShadow]

They could just have a pooled trust with no individual-direction.

I believe John Hancock and Hartford among others do just recordkeeping, although not sure of their fees.

[shERPA]

The important thing is that you as a non-producing TPA don't get sucked in to fulfilling the financial advisor's role as you are not being compensated for it and presumably are not licensed to do so.

[Bird]

As noted, you could have a pooled trust and buy no-load funds. If they want self-direction, they could contact T. Rowe Price or American Century; I think they will work directly with plan sponsors and have some kind of platforms...

...but I wouldn't want to have anything to do with it, as a TPA or as a "consultant". I've seen enough of them to know that they're not designed to work efficiently with a third party. They just want the money and couldn't care less about coordination with anyone else. And as also noted, you have to be careful about being sucked into an advisor role.

More ideas, again not recommended but FWIW - ExpertPlan will work directly with sponsors on a turnkey basis, and Fidelity...if you don't think a $5,000/year minimum is too much (!).

[BG5150]

401k prospect wants no financial adviser involved with the plan "to save money."

We could establish a brokerage account for each participant.

Any other ideas or investment companies that might be a good fit?

Has anyone mentioned fiduciary responsibility to them? The DoL takes a dim view on brokerage-only setups.

From FAB 2012-02R, Q: 39

Nonetheless, in the case of a 401(k) or other individual account plan covered under the regulation, a plan fiduciary's failure to designate investment alternatives, for example, to avoid investment disclosures under the regulation, raises questions under ERISA section 404(a)'s general statutory fiduciary duties of prudence and loyalty.

Also, fiduciaries of such plans with platforms or brokerage windows, self-directed brokerage accounts, or similar plan arrangements that enable participants and beneficiaries to select investments beyond those designated by the plan are still bound by ERISA section 404(a)'s statutory duties of prudence and loyalty to participants and beneficiaries who use the platform or the brokerage window, self-directed brokerage account, or similar plan arrangement, including taking into account the nature and quality of services provided in connection with the platform or the brokerage window, self-directed brokerage account, or similar plan arrangement.

[MoJo]

401k prospect wants no financial adviser involved with the plan "to save money."

We could establish a brokerage account for each participant.

Any other ideas or investment companies that might be a good fit?

Assuming they are clueless, and obviously this prospect is rather "cheap," why not just "pass" and tell them "no"?

[mbozek]

DOL position on directed brokerage accounts is ambigiious. One one hand the DOL wants them to conform to fiduciary rules but also recognizes that plans dont have to monitor investments and disclose fee information. If plan offers participants opportunity to invest in 1000 or 2000 funds, etf, etc where retail fees will be charged is there a fiduciary obligation to make lower cost funds available?

See below link.

http://articles.chicagotribune.com/2012-07...les-small-plans

[GMK]

Nothing wrong with reducing unnecessary fees.

Has the client looked into either Verisight, Inc. or EmployeeFiduciary.com?

(Not an endorsement of either firm, and maybe that's not what they're looking for.)

[Bill Presson]

We've done this kind of thing before. And, inevitably, we start getting the requests "at the employee meeting just explain what a mutual fund is and what the types are, etc."

We will not accept plans without an advisor anymore.

[mbozek]

Nothing wrong with reducing unnecessary fees.

Has the client looked into either Verisight, Inc. or EmployeeFiduciary.com?

(Not an endorsement of either firm, and maybe that's not what they're looking for.)

But doesnt using a low cost provider result in lower level of services to plan participants such as no call centers, investment education or enrollment meetings. Financal advisors provide additional services such as give presentations to employees on investment options and enrollment because they are paid a fee. DOL thinks plans should provide investment education but most of the low cost providers do not provide investment education to plan participants leaving the question of who provides this service.

It is oxmornic to want low cost providers to administer the plan at the cheapest cost and to also want the servce providers to offer all of the ancilary support services that 401k participants need to intelligently invest their contributions.

[GMK]

No argument here, Mr. Bozek.

I believe that Verisight provides all the ancilliary services (phone center, investment education, enrollment, presentations, plan design, etc.). With the recent change of ownership, we'll see if they continue the service and quality at a low price. (We don't use them, by the way.) Looking back at my notes, Employee Fiduciary does what it does at low cost, but there are important holes that would need to be filled.

[QDROphile]

How has the DOL expressed its thought that investment education should be provided? All I remember is a preamble that very clearly stated that investment education was not required.

[mbozek]

How has the DOL expressed its thought that investment education should be provided? All I remember is a preamble that very clearly stated that investment education was not required.

See link to statement of Phyllis Borzi testifying that investment education is important to participants. Scroll down to end to find statement on distinguishing education from advice. While there is no DOL requirement to provide investment education there have been statements by some commentators that providing investment education could be considered a fiduciry duty. I dont know of any case where a fiduciary has been sued for failure to provide investment education.

http://www.dol.gov/ebsa/newsroom/ty072611.html

[david rigby]

I dont know of any case where a fiduciary has been sued for failure to provide investment education.

...yet.