The 20 Rising Stars of Retirement Plan Advisors 2007 - (Page 14) sponsored article and time-based needs, participants will select a pre-allocated portfolio made up of non-proprietary funds approved through our strict due diligence and investment selection screening process. Although participants can choose to have their portfolios automatically rebalanced to maintain their chosen investment strategies, they are responsible for monitoring their asset allocations and contribution levels and making the appropriate changes to either or both as they deem necessary. 3. The Standard’s “do it for me” solution. For those plan participants who do not have the time, knowledge and/or discipline to manage their retirement savings, there is a better solution. They can choose to delegate the active and ongoing management of their accounts to The Standard, a registered investment advisor. The Standard solution goes beyond the traditional managed account/advice solution that is prevalent in the industry today. It is not just an investment solution. It is a formal, goal-based savings and investment plan which is implemented and actively managed by The Standard. The Standard solution remains actively managed, and assumes that a participant’s personal situation will change and evolve over time. As changes occur, the participant can call a registered investment adviser representative and have their savings and investment plan updated immediately. For example, a change in marital status usually requires an immediate update of the plan. Changes in a participant’s tolerance for risk over time can be incorporated into the plan as well. This asset allocation flexibility is far superior to an age-targeted or time-based portfolio approach. Such solutions only incorporate an initial snapshot of risk tolerance, and are not personalized to an individual’s unique needs. The popularity of The Standard managed account solution is reflected in an adoption rate significantly higher than the current industry figures for other managed account programs—nearly 60%. This rate has held steady for over two years. In fact, participants in this group are willing to pay a nominal fee for this service. EVERYBODY WINS How do all parties in the channel benefit from a participant-centric approach? The process of building a customized plan begins with the information included in the initial gap analysis report. Outside assets, as well as spouse/partner assets, are also included. From this information, a formal savings and investment plan is produced that focuses on achieving the participant’s projected retirement income needs. “As changes occur, the participant can call a registered investment adviser representative and have their savings and investment plan updated immediately.” The Standard solution looks at each participant’s unique situation and determines an optimal course for the dependent variables of savings rate and asset allocation. Assets are invested among a series of broadly diversified, institutionally-priced portfolios. Once a participant’s savings and investment plan is implemented, the account is reviewed on a quarterly basis. Rebalancing or re-allocations are performed as necessary. Participants receive a progress report each quarter which illustrates progress made toward reaching their goals. In the case of a projected retirement income shortfall, tactical solutions are implemented (such as increasing the savings rate or revising the asset allocation strategy.) 14 RETIREMENT PLAN ADVISORS RISING STARS PLAN PROVIDER AND PLAN ADVISOR Providers and advisors who help participants meet their retirement income needs will be highly sought-after by plan sponsors. According to the 2006 Boston Research Group DCP Survey of plan sponsors, almost all non-human touch services such as recordkeeping and Web sites have been almost completely commoditized; levels of satisfaction for everything except employee education and investment performance are at all-time highs. To become market leaders, providers and advisors must make it a top priority to focus on a participant-centric approach to retirement planning. PLAN SPONSOR A highly effective retirement benefit program will help SEPTEMBER 2007
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