How the Makes Sense 401k Benefits the Servicing Advisor

The Makes Sense 401k provides you with a state-of-the-art 401k product you can proudly offer to all your small and medium-sized business prospects and clients. With unparalleled features and benefits, the Makes Sense 401k gives you all the tools you need to establish or expand your presence in the 401k marketplace.

Created by acknowledged leaders in the field of retirement plans, the Makes Sense 401k combines dramatically reduced liability for employers (and for you), a comprehensive lineup of extremely low-cost ETFs for employees, and an All-Star team of top industry service providers to help you open doors, establish new relationships and strengthen old ones.

Our Servicing Advisors play a vital role in introducing new prospects to the benefits of the Makes Sense 401k, and your efforts to welcome new participants and “roll out the red carpet” in the areas of facilitation, implementation and education are sure to win you new relationships, and a bigger book.

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Here are some of the top reasons why the Makes Sense 401k should become an important part of your practice:

Short Sales Cycle The Makes Sense 401k already exists, and employers merely adopt it.

The Makes Sense 401k is truly “Plug-and-Play”, which means there are no committees to form, no lawyers to retain, no organizational papers to file, no vendor “competitions” to manage. And there are no minimum plan-size requirements.

Almost No Fiduciary Liabilities

Unlike most 401ks, Makes Sense 401k Servicing Advisors assume almost no fiduciary liabilities. The Makes Sense 401k’s investment manager and administrator absorb all of the 3(21) and 3(38) fiduciary liabilities normally assumed by the advisor.

Reduced Insurance and Compliance Issues

Because you are not a plan fiduciary, you will not need enhanced E&O coverage, and compliance issues are likewise minimized.

You Own the Relationship

The Makes Sense 401k does not compete with you, and it will never replace you. The relationships you develop in your role as Servicing Advisor belong to you, and they will remain yours for as long as you continue to service the account.

You Determine Your Fee

The Makes Sense 401k gives you the ideal compensation arrangement: the fee paid TO you is determined BY you.

Wide Open Marketplace

The small to mid-sized business marketplace has been underserved by the 401k industry, and those that do service it have offered high-cost, underperforming plans that have saddled employers and their advisors with unwanted and dangerous liabilities. The Makes Sense 401k breaks the mold and will be welcomed by your prospects and clients. With its unique structure, extremely low-cost all-ETF investment lineup and innovative Managed Portfolios, you’ve got a new and exciting story to tell that will “make sense” to even the most jaded prospect.

Devote your time to your business – let the retirement professionals operate your 401k plan and shoulder the liabilities!

Investment Options in the Makes Sense 401k

Participants in the Makes Sense 401k have the freedom to select their own choices of investments from the plan’s investment lineup. These self-directed participants make their choices through a simple online interface, available 24 x 7. Participants who do not choose to make their own investment selections will be automatically defaulted to an age-appropriate Risk Managed Portfolio (which can be changed at any time by the participant.)

Self-Directed Investment

Participants who choose to direct their own investments can select any combination of one or more choices from the menu of ETFs and professionally managed portfolios.

The ETF portion of the menu offers an unparalleled combination of broad asset class coverage and extremely low cost, and features ETFs from teh industry’s leading suppliers: Vanguard, Charles Schwab, State Street SPDR, iShares and PowerShares.

The professionally managed portfolio choices include three “blanced” portfolios (the Risk Managed Portfolios) and four specialy portfolios, each with its own focus.  Detailed information about the professionally managed portfolios is available via the Makes Sense 401k online participant interface.

Unlike Most 401k plans, there are no penalties or restrictions on trading activities such as minimum hold times or maximum allowable transaction counts.

 

 

Default Investments

Participants who do not choose to direct their own investments will be automatically assigned to one of the three “balanced” Risk Managed Portfolios. These portfolios are constructed from the very same low-cost ETFs contained in the Self-Directed investment lineup, and provide participants in the Makes Sense 401k easy access to expert professional portfolio management. Better yet, these Portfolios have been certified by Dalbar for use as Qualified Default Investment Alternatives (“QDIA”) and meet all ERISA requirements applicable to QDIA’s in 401k plans (more on Dalbar below).

Automatic assignments to Risk Managed Portfolios is age-based as follows. Participants can freely change or cancel the automatic assignments at any time.

About Dalbar Validation

The Risk Managed Portfolios have been awarded the DALBAR QDIA Validation since 2014, certifying that they are suitable for use as a Qualified Default Investment Alternative and meet all ERISA (Employee Retirement Income Security Act) requirements applicable to QDIAs in 401k plans.  In addition, the Risk Managed Portfolios were awarded all A(highest) rankings in the separate DALBAR Asset Allocator analysis.

The DALBAR QDIA validation is recognized as a primary means for plan sponsors and advisors to satisfy the ERISA requirements, including the requirement of due diligence and analysis of QDIAs used in their 401k plans.  Since the Department of Labor has also stated its intention to require that advisors who provide advice on RIA investment must meet the same investment advice standards as the QDIA standards, this validation provides an important level of security and compliance to both the advisor and the IRA investor.

Self-Directed Investment Choices -ETFs

Unlike the vast majority of 401k plans, the Makes Sense 401k offers not only coverage of ALL U.S. equity styleboxes, but also real estate, materials & resources, both developed and emerging international funds, and broad coverage in bonds.

 

Self-Directed Investment Choices -ETFs

Unlike the vast majority of 401k plans, the Makes Sense 401k offers not only coverage of ALL U.S. equity styleboxes, but also real estate, materials & resources, both developed and emerging international funds, and broad coverage in bonds.

 

 

Each portfolio reduces its equity exposure to just 10% when the objective portfolio rules indicate a high risk exists in the markets.  Click here to see the Risk Managed Portfolio Investment Process page for a diagram of the investment process.  The goal of the Risk managed Portfolios is to reduce the potential for damage in high-risk periods, while taking advantage of low-risk periods.

 

Specialty Portfolios

Seven Specialty Portfolios are available to self-directed participants in the Make Sense 401k.  Additional information about these portfolios is available via the Makes Sense 401k online participant interface.

 

Blended Specialty Portfolios

Five Blended Specialty Portfolios are also available to self-directed participants in the Makes Sense 401k.  These portfolios seek to reduce risk by deploying funds across multiple Specialty Portfolio strategies, and blends are offered for a variety of investor profiles.  Additional information about these blended portfolios is available via the Makes Sense 401k online participant interface.