With the stock market averaging approximately 10% returns over the long term and the average equity investor averaging 3.7%, Guardian has realized the need to offer help to 401(k) investors.
401k Toolbox, a registered investment advisor and pioneer in the 401(k) investment advice market, has been managing individual participant accounts since 1996. Their investment philosophy of "winning by not losing" or to "capture most of the good times, and miss most of the bad times", combined with a strict rules based investment model has led to an average return of more than 10% annually over the past 10 years.
With professional advice from 401k Toolbox plan participant's can now focus on how much money they can save for retirement, and not have to worry about the difficult investment decisions that often keep many people from participating in their company plan at all.
Benefits to Company Owners:
- Fiduciary liability removed from company owner for all employees who use managed account services
- Increased likelihood of successful retirement for employee's
- Investment advice and educational materials come at no cost to company owners
- Ability to offer managed account services as a default investment alternative. Through this process, we see plans with 90-95% participation in managed accounts.
- Higher overall participation in 401(k) plan because employees can now focus on how much they can save for retirement, rather than having to make difficult investment decisions when enrolling.
- Employees get the benefits of personalized investment advice from 401k Toolbox rather than the more generic design of a Lifestyle/Lifecycle fund.
To view a brief video about 401k Toolbox from their President, click here
To view a more detailed returns history for 401k Toolbox, click here
To learn more about the benefits of a Qualified Default Investment alternative, click here
401k Toolbox vs. Lifestyle/Lifecycle Funds
Several other 401(k) plans are just now catching up to the Guardian Advantage 401(k) and beginning to offer investment advisory services for their plan sponsors and participants. These however do not have the services of 401k Toolbox, along with their strong 10+ years of returns history and experience. Instead, other 401(k) plans largely rely on the services of Lifestyle/Lifecycle Funds. Studies have shown that these kinds of funds are lacking in several respects.
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These funds are designed for participants to place 100% of their assets in, with a date closest to each participant's retirement being all the criteria for investment strategy. 401k Toolbox has several different investment portfolios and takes other assets into account when helping each participant craft their investment strategy.
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There is very little consistency between fund families and how they invest, even within funds with the same maturity dates. In other words one company's 2020 fund can have up to 71% equity exposure while another may have as little as 46%.
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Company owners are left with little or no options if the maturity funds in their plan significantly under-perform. Among 2010 funds, the best performer was 11.13% while the worst performer was 3.82%.
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These funds get universally misused in most cases, with participants re-allocating on their own during market declines. A Fidelity study shows that nearly 50% of these fund holders also hold other funds, which defeats their purpose and benefit.
Fairway Wealth Management's primary objective is to assist company owners who are a part of the Guardian Advantage 401(k) plan in satisfying a large portion of their fiduciary requirements with regards to selecting and monitoring investment options. The mutual funds available within the Guardian Advantage plan span the risk/return spectrum, and include several of the most respected fund families such as:
AIM
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Goldman Sachs
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American Century
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Janus
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Davis
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JP Morgan
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Delaware Investments
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State Street Global Investments
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Dreyfus
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T. Rowe Price
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Fidelity Investments
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Other services provided by Fairway Wealth include ongoing investment monitoring, coupled with quarterly and annual review reports and conference calls for all company owners to discuss investment performance.
To view a list of all the funds available within the Guardian Advantage 401(k) plan, click here
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