2 simple steps to a better retirement plan
TRANSCRIPT
2 Simple Steps to a Better Retirement Plan
1
Mark Zoril
Founder
Case Studies
2
1 2 3No Revenue Sharing Flat FeesIndexingIndustry and Your Employees
3
4
Values
5
Why Your 401k is Worth Suing OverYour Employer May Cost You $100k
in Retirement SavingsHow Your 401k Could Rip You Off5 Fees That Are Killing Your Retirement
High Fees Eroding Many
401(k) Retirement AccountsFour Biggest 401k Conflicts
7
10
ASSETBiggest
11
Financial Service IndustryLifestyles/Careers of
Protect Your Employees
12
Large Plan = 1.05%
Average Costs per Participant:
1.42% = Small Plan
13
Target?What can you
14
1.42 1.00 .75 .50
15
Hopes | |PLAN
Opportunity | |Family Growth
Challenges
16
Two Simple Steps
17
18
DiversificationLow Cost
Shareholder
Primarily Index
Owned
Funds
Average =At Cost .12
19
Active FundsWith Manager
= 1.08%Average charge
20
Performance
21
“If there is anything in the whole world
of mutual funds that you can take to the
bank, it’s that expense ratios can help you
make a better decision. In every single
time period and data point tested, low cost
funds beat high cost funds.”
August 2010
22
“There is substantial evidence that Wall Street managers
are unable to beat passive equity index funds that cost much
less in fees…If public pension fund assets were indexed to
relevant markets rather than actively managed, the public pension
systems in Maryland and across the United States would save
enormous amounts of money on fees, without undue harm to investment
performance…pension systems would be wise to index the systems’
portfolios to ensure average investment returns. This would be a safer, more
responsible use of system resources than paying Wall Street management
firms millions of dollars each year to deliver sub-par results on public stocks and
bonds and risky private alternative investments.”
July 201223
“The Triumph of Index Funds”“Investors Flock to Vanguard, Turning
Away from Stock Pickers”
“America Can’t Afford Wall Streets’
Terrible Investment Advice”“Why ‘Boring, Dull Passive’ Investing is Working”“Passive Investing is Winning the Debate”“Active Funds Stink Worse Than Ever”
24
SharingRevenue
36
Commissions
12b-1Insurance Charges – Wrap Charges
SubT-ABroker
Dealer
Soft
Money 37
GAMEShare ClassWhich share class
do you use?
38
Growth FundAmerican Funds
of America
1.44% 1.40% 1.09%
.68% .54% .49%
R1 R2 R3
R4 R5 R6
39
Blue ChipT Rowe Price
.74% 1.00% 1.25%
Growth
FundAdvisor
Class
Class
R
Growth fund
40
41
Record Keeper
Advisor
42
Assets% of
43
Stop paying
Direct
Flat Fees - Unbundled
44
Start paying
Record Keeper
OR
$1,500
OR
$5,000 $10,000
Advisor $750 $3,000 $10,000
45
Case Studies
46
Company A12 Participants$2.2 MillionInsurance & Active Funds
47
1.9% of 2.2 million = $41,800Total Cost
Employee Paid
48
New Plan
49
Record Keeper = $2,600
Advisor = $2,300
= $2,640
50
Total Cost = $7,540
EE Paid
= $2,640
EE Paid
= $41,900
51
Old Plan
= $41,900Total cost
New Plan
= $7,400Total cost
52
Average Annual Savings per Employee =
$3,300$9000
Company B
110 Participants
$7 MillionWrap Fees & Active Funds
53
Total Cost = 1.5%
Employee Paid!$105,000
54
Record Keeper = $14,000
Advisor = $10,000
= $8,400
55
Total Cost = $32,400
56
EE Paid
= ALL
EE Paid
= ALL
Old Plan
= $105,000Total cost
New Plan
= $32,400Total cost
57
Average Annual Savings per Employee =
$660$3000
Company C5 Participants$400,000A Shares & Active Funds
58
1.6% of $400,000 = $6,400Total Cost
Employee Paid
59
Record Keeper = $1,780
Advisor = $800
= $480
60
Total Cost = $3,060
EE Paid
= $600
EE Paid
= $6,400
61
Old Plan
= $6,400Total cost
New Plan
= $3,060Total cost
62
Average Annual Savings per Employee =
$1,160$2,400
Large Plan =1.05% - $50,000,000
Average Costs per Participant:
1.42% = Small Plan - $5,000,000
63
Company ACompany B
= .12%= .44%
Company C = .17%
Solution
64
65
Flat Fees Direct Payments
66
Simplicity Clarity Accountability
67
Help Your
Employees Keep More of Their Money
68
69
ValuesBid and
Compare
OnePage Fee
Evaluation
Assess
Plan
2 Simple Steps to a Better Retirement Plan
70
Mark Zoril
Founder
2 Simple Steps to a Better Retirement Plan
71
Mark Zoril 855 965 4286 or 612 965 4286
Founder [email protected]