Invest n Retire

"The difficulty lies, not in the new ideas, but in escaping from the old ones. John Maynard KeynesInvest n Retire1

The goal for todays Webinar is to introduce you to new technology that will enable you to provide superior services for your current clients and grow your assets under management with new ideas and services to plan sponsors. This technology will enable you to escape from the status quo.

1Invest n Retire

Companies that did not adopt new ideasBlockbuster, Motorola, Dell, Kodak, Sears, Sony, Yahoo

Invest n Retire2

This is a short list of companies that failed to adopt new business models. The same is true in the financial service business. Example Tom Mathews and WealthWave.

2Invest n Retire

The future of the financial industry

Invest n Retire3

The fastest growing financial service firms will be the firms that adapt to new technology and offer services that their competition cannot offer because their competitors are stuck with old ideas. As an example Robo advisors.

3Invest n Retire

The future is ETFs

Invest n Retire4

4Invest n Retire

Exchange Traded Funds MarketExchange Traded Funds (ETFs) pulled in $351.3 billion in net new money in 2016. Global ETF assets were $2.9 trillion in December 2016.1September 2016 actively managed funds lost $170 billion over the last 12 months. 2PWC has predicted that global ETF assets will increase to $5 trillion by 2020. 3

1 BlackRock Global Highlights January 2016 2 Investment Company Institute3 2015 Mutual Fund Developments PWC

Invest n Retire5

5Invest n Retire

Death of Mutual Funds AcceleratesThe mutual fund is dead and the ETF is ascendant.1Charles Schwab earned $839 million last year from its lucrative Mutual Fund OneSource program. And yet, ETFs outpolled mutual funds for net inflows 130-to-1 last year among Schwab's customers. 2Over the past six years, ETFs have pulled in more than $1 trillion in net inflows while mutual funds havent managed to attract $200 million. 3

1 ETF.com Hougan: Death of Mutual Funds Accelerates August 2015 2 Ibid.3 Ibid.Invest n Retire6

6Invest n Retire

Mutual Fund PredictionsThe dirty little secret which enriches the mutual fund industry. Almost all 401(k) investments are mutual funds.1

1 ESA Intergrated Marketing

Invest n Retire7

I had a call last month with a marketing firm whose clients are mutual fund companies that provide record-keeping services for DC Plans. 7Invest n Retire

State of the 401(k) Industry

Invest n Retire8

8Invest n Retire

The Future of 401(k)Plans

Invest n Retire9

9Invest n Retire

401(k) plans - ETFsThe retirement industry has been suspended in a time warp, operating on antiquated systems developed in the 80s. With our patented technology Investment Managers no longer have to be constrained and can move forward with modern technology to provide managed portfolios and superior investments ETFs. Darwin Abrahamson, CEO

Invest n Retire10

10Invest n Retire

Value to investment managersTandemModels SaaS technology enables investment managers to design diversified portfolios using ETFs. TandemModels is delivered in a single platform for model design and management, trading, portfolio re-balancing, and performance reporting.

Professional ManagementEmployees are defaulted to an asset allocation model (AAM), designed by a investment manager, contrasts drastically from the typical service provider who force employees to choose from numerous mutual funds.

Invest n Retire11

11Invest n Retire

Self-Aligning PortfoliosThe advantages of self-aligning portfolios:(a) maximizes the investment strategy dollar-cost-averaging (b) mitigates risk in all market environments by maintaining portfolio alignment(c) less trading at the end of each quarter to bring the portfolio into alignment

Invest n Retire12

12Invest n Retire

Value to sponsorsReduce sponsor fiduciary risk

Hire an ERISA 3(38) investment manager

Compliant with new fee disclosure regulations

Remove all revenue sharing and 12b1 fees and multiple fund classes

Reduce total cost to participants by up to 50% compared to mutual funds

Invest n Retire13

13Invest n Retire

Value to sponsorsSubstantially reduce costs and administrative burdens

Invest n Retire14

14Invest n Retire

Value to participantsProvide an adequate portfolio for retirement income

Invest n Retire15

employee saves 65 % annually through the Invest n Retire platform. Assumptions for one participant:(i) portfolio $57,856 (ii) IRS annual contribution $18,000 (iii) 8% annual rate of return and (iv) reinvest savings15Invest n Retire

Value to participantsProvide a professional managed portfoliosIncrease returns by using lower cost ETFsMatch retirement income goals to portfolio

Invest n Retire16

My name is Jennyand I am writing because of a personal connection to mental health problems caused by financial stress. The life of a freelance writer can be financially insecure as you might imagine, but I have learned recently how money matters can affect the mental and physical health of older adults like my parents who are now planning for retirement.

Recently, I came across investnretire.comwhile researching a piece inspired by my own family. I would like to write about your service and goals that you provide for retirement savings.16Invest n Retire

Greatest risk to participantsThe greatest risk for American workers is not down market or market volatility but not having an adequate retirement income. Frank Sortino

Invest n Retire17

My name is Jennyand I am writing because of a personal connection to mental health problems caused by financial stress. The life of a freelance writer can be financially insecure as you might imagine, but I have learned recently how money matters can affect the mental and physical health of older adults like my parents who are now planning for retirement.

Recently, I came across investnretire.comwhile researching a piece inspired by my own family. I would like to write about your service and goals that you provide for retirement savings.17Invest n Retire

401(k) Plans in Crisis

18I know that there is not any disagreement that the mutual fund companies and insurance companies that dominate the 401(k) market are not achieving the goal for which 401(k) plans were created, to provide an adequate retirement income for the participants. The proof is current retirees have a median balance of $61,346 in their 401(k) plan. Clearly no one can live on this low amount of money. If your employees do not have an adequate retirement income at retirement age can you afford to keep them as employees and pay their increased cost of health care? To solve this problem for your participants you must take the following steps.Remove the participants from making their own investment decisionsIncrease employee participation Increase the contributions rates of participantsHire and monitor the service providers that can achieve these goals

ICI 401(k) Plan Research Perspective 2008

Invest n Retire disruptive technologyInvest n Retire19

19Invest n Retire

Exceeding the challengeNew ideas are your futureInvest n Retire20

20Invest n Retire