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New App for Financial Advisors Expedites Labor-Intensive Due Diligence Process 401k Plans

New App for Financial Advisors Expedites Labor-Intensive Due Diligence Process 401k Plans
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Crypto Queen
Published on
October 8, 2018
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Industry veteran Scott Buffington launches the “Netflix” of the small business retirement planning world.

This new solution leverage digital technology to efficiently assist financial advisors and third-party administrators.For years, financial advisors have had to spend 10-plus hours on due diligence while working on small business retirement plans -- a very manual, labor-intensive, and completely inefficient process. Now, Florida-based 401kplans.com has a new app on the market that cuts down this process from hours to literally minutes.The technology is delivered through cloud-based software and offers a platform for effective and efficient decision-making for financial advisors, corporate plan sponsors, asset managers, third-party administrators (TPAs), and broker-dealers. The app is customizable and has the flexibility to include specific 401(k) providers, approved investment options, 3(21)/3(38) fiduciary programs, as well as dashboards of reporting and analytics for enhanced oversight.According to 401kplans.com: “The regulatory environment and the constant pressure on margin is forcing change within the retirement plan industry. Retirement plans have become the ‘Blockbuster Video’ to the ‘Netflix’ of other voluntary benefits, as we have yet to embrace technology to assist with distribution. There is a significant opportunity to work collaboratively to launch a platform that assists financial advisors and TPA’s, as well as supports the business models and value propositions of providers and investment managers.”Leveraging Technology and More Than 25 years of Industry ExperienceWith a successful 25-year career in the retirement and investment industry, including seven years at MassMutual as Head of National Sales and 13 years at Putnam Investments, 401kplans.com Founder and CEO Scott Buffington, spent nearly two years working closely with financial advisors, broker-dealers, TPAs, 401(k) providers and investment managers to develop this innovative digital platform that offers financial advisors a repeatable, documented process that will significantly enhance efficiency and transparency, and mitigate risk for plan fiduciaries. “In the small plan market, it is estimated that greater than 80 percent of transactions are completed by ‘generalist’ financial advisors who may not have the expertise, tools, or capacity to follow a prudent process where anything more than total cost is measured,” says Buffington. “Retirement ‘specialist’ financial advisors have the knowledge but may not have the capacity to spend the hours needed to complete a proper due diligence process for a small plan.”How The App WorksFinancial advisors can complete a documented eight-step due diligence process, enabling them to:

  • Download and update publicly available information for a plan
  • Calculate the point in time total cost of the plan
  • Determine the allocation of the assets by fund category

The system then automatically compares the total cost of the plan to a “reasonable range” of a transparent benchmark average based on the actual plan data and market-based pricing. Providers that are a good fit for the client are identified, and a customized due diligence document -- which includes the broker-dealers required compliance language and disclosures -- is created. Following presentations from the retirement wholesalers, the financial advisor can select the winning provider right on the app and expedite the transition process to the new provider. “Going out to bid on a corporate retirement plan can require many hours of human capital,” writes Massachusetts-based investment advisor Jonathan Kondracki, in a testimonial on the website. “401kplans.com is an intuitive platform that solves this time crunch. By entering basic plan data, my clients and I are afforded immediate access to multiple, upper-echelon record keepers. A tremendous resource and true time saver for my practice.”The 401kplans.com app is offered to financial advisors by invitation from investment managers, 401(k) providers and TPA’s that participate on the platform. A financial advisor may also request access to an account directly on www.401kplans.com, or by downloading the App on the Apple App Store (IOS) or Google Play Store (Android).

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