Investment Management Expertise That’s on Your Side

There’s no need to do it yourself or pay other providers to help you—our Investment Committee services are included as part of every ShareBuilder 401k plan. This maximizes the fiduciary protection for you and your business and saves you the time, energy and expense of managing these reviews on your own.

We Handle the Investment Duties for You

As your provider, our ShareBuilder Advisors Investment Committee manages the investment roster, as well as the make-up and allocations of five model portfolios for you and your company. This service is known as an ERISA 3(38) advisor and it’s the highest level of service in terms of fiduciary role and work a provider can take on for your investment offering.

The committee consists of investment professionals such as a CFA Charterholder, a Certified Financial Planner, and other industry experts. The committee uses modern portfolio theory in considering diversification and asset allocation.* To assist in our analysis, we consider the outputs from a Markowitz mean-variance optimization model that is designed to produce the optimal expected return given variable constraints (e.g. loss limits, historical returns, standard deviations, correlations, etc.) for each model portfolio we offer at ShareBuilder 401k. Essential policy objectives are asset diversification, long-term performance, and keeping fund expenses low.

We’re an Unbiased Fiduciary

Our Investment Committee’s goal is to deliver you and your employees an appropriate retirement investment roster and ensure that the roster is aligned with the Plan’s Investment Policy. We’re not a fund provider, so we take a balanced, unbiased view of selecting, reviewing and adjusting the fund roster for what we deem as suitable for retirement investing.

Every employer is responsible for ensuring their 401(k) is run in the best interest of its employees. When it comes to the investment offerings, a regular review of investments is required to provide a diverse, cost-effective lineup that helps minimize the chance of large losses. We take on this fiduciary duty for your plan, saving you time and energy and leveraging experts and tools that may be unavailable to companies doing this work internally. It also takes the investment roster management fiduciary risk and burden off your shoulders.

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Our Investment Philosophy

ShareBuilder 401k’s investment selection and monitoring process is founded on our investment philosophy. The core tenets of the philosophy are:

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    Investing is a long-term proposition.

    We’re not about short-term trends, momentum or performance. The risk of large price declines and investors’ inability to successfully time the markets consistently is too significant a hazard for most employees.

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    Asset allocation and diversification are essential.

    The most important investment decisions are not the specific investments you select, rather it’s your asset allocation—your mix of stocks, bonds and cash. Additionally, the fine tuning within the stocks and bonds is important—value and growth, domestic and international, large and small capitalization stocks. Being broadly diversified, with exposure to all parts of the stock and bond markets, reduces the amount of risk your portfolio is exposed to (but can’t guarantee against any market losses).

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    Costs matter.

    Investments with consistently low management fees and transaction costs can give employees a head start in achieving competitive returns. While there are costs for professional management, large or excessive fees create a drag on returns that can make it more difficult for the fund manager to add value. Every dollar paid in expenses is one less dollar invested in the market. High fund turnover can drive up transaction costs. Exchange Traded Funds (ETF’s), a type of index fund, typically offer low expenses.

401(k)s Don’t Need to be Risky Business

Employers and administrators of your 401(k) plan automatically take on fiduciary duties, whether they’re aware of it or not. These associates can be personally liable for breaches and negligence with a plan. Most of 401(k) providers take on no fiduciary role in serving your benefits, but we do for the investment roster duties. We’re on the hook to perform all the investment management duties in line with ERISA rules. While it’s still important that you oversee our work (we provide reports to assist in the review), this can add a level of protection for you and your company.

We Can Help You Compare Plans

If you want some guidance in determining whether your plan makes the most financial sense for you and your employees, we can help by reviewing your costs and even forecasting the impact.

* Diversification and Asset Allocation does not guarantee a profit, or protect against market losses.