Unfortunately, as the market has shifted over the years towards high-fee, proprietary funds offered by large financial services companies, 401(k) plans have lost their way, becoming less of a benefit to employees and employers. We believe that when designed and implemented correctly, 401(k) plans can work well and easily meet the needs of plan sponsor and plan participant alike.
The Problem: Where 401(k) Plans Lost Their Way
In the recent past, the market became dominated by huge financial services companies that were most concerned with crowding as many of their high-fee, proprietary funds into the fund line-ups as possible. These exorbitant fund fees are used to hide everything from record-keeping expenses to broker compensation, making it impossible for plan sponsors and plan participants to truly understand plan costs. Even recent federal legislation has not been able to shine much-needed light on this very “un-fiduciary like practice”.
These same providers refuse to take on any of the liability of fund selection and performance monitoring, instead forcing the executives of the companies who operate the plan to shoulder all of that liability-personally. (Erisa mismanagement of a 401K plan can become a “personal liability” to the executive named as Plan Trustee.)
Meanwhile, participants are left to fend for themselves, forced to choose from a baffling menu of investment options to cobble together an investment portfolio that they alone are responsible for managing and maintaining—often with poor results.
As a result, these 401(k) plans can be confusing, costly, and a burden to employees and the companies that provide them.
The Solution: a Better 401(k)
At Cambridge Wealth Counsel, we believe the 401(k) plan can work. It can meet the needs of plan sponsor and plan participant alike, and do so in a cost-effective, client-focused manner.
Cambridge Advisors Access™: A Better Way to Do the 401(k)
Cambridge Advisors Access™ is the way the 401(k) should be. Our program provides:
- Expert, conflict-free advice to plan sponsors and their participants.
- Access to some of the most sought-after investment vehicles in the world.
- Total plan costs that are much lower than many of the programs offered by the large financial services providers.
The Cambridge Advisors Access™ program highlights include:
- Fee-only, independent Registered Investment Advisors who serve as both ERISA 3(21) and 3(38) advisors, taking the liability for investment selection and performance monitoring off of the plan sponsor.
- Expert, one-on-one advice to plan participants.
- Access to institutional investment vehicles that are not available on retail 401(k) platforms and normally require a minimum investment of $20 million per fund.
- Advisor Managed Portfolios that give participants the ability to turn the management of their 401(k) assets over to expert advisors.
- A comprehensive fund menu that is created by independent advisors using our Proprietary Fund Screening Process.
- The flexibility for participants who desire to self-manage their own portfolios to open a self-directed brokerage account and select from among thousands of mutual funds, stocks and bonds.
- Independent providers who are free from the conflicts of interest that plague traditional 401(k) plans.
- No hidden fees or fee-sharing arrangements between providers, giving you full transparency for all plan costs. plan costs.