Looking for feed back on working with Konstantin Litovsky or other recs

[jacksonhole]

In short, my practice is considering a change in our retirement plan management.  We are a small group with 4 partners and 9 total employees with around $5,000,000 in total plan assests.  I have read several posts on the forum and in the blog by Kon (including one this week) and have felt they were all informative.  Does anyone use his firm now or in the past?  What has been your experience and impression?  Would you recommend him?  There was also some discussion at the end of his last post about other competition, which he avoided answering.  I would like to know who else fills that same space for smaller group plans?  If there is someone you use, recommend, or don't recommend, let's hear about it.  Not trying to be personal, just trying sift through the chaff to find the best options for myself and others.

 

Thanks,

 

[Hank]

My wife and I looked at going with Konstatin for the DB plan at her office. We never got past the preliminary investigation phase, so we have no personal experience actually working with him.

We had a 60:40 split between Vanguard total stock market and Vanguard total bond market.  Konstantin said that was too aggressive of an asset allocation for a pension plan.  Quite frankly, a 60:40 split is more conservative than we would like, but we picked this for a defensible asset allocation that a reasonably prudent investor would select.  Konstantin didn't mention just what asset allocation he would like to see for a DB plan.

You can lose a lot of money through excess fees.  You also can lose a lot of money by investing too conservatively.

[q-school]

this seems an odd post (to me) if he's a sponsor of the website.

i am sure he would be happy to provide you with references.

having said that, i'm not sure how else you would go about getting the information you seek.

in the end, it is a leap of faith probably.

 

[Ivy]

I had some preliminary discussions w Konstantin a few years ago.  My group was looking to leave our financial advisor, but decided to stay w him after he dropped his AUM fee down from 1 to 0.5%.  I still voted to go w Konstantin, but was out-voted.

I found Konstantin to be very helpful, honest, and up-front in regard to fees.  I would have hired him.

A friend of mine, in another anesthesia group, uses Employee Fiduciary and seem to be very satisfied w them.

[Ricky]

We use him for our dental practice. It's been about 3-4 years and I'm happy so far. His default plans can be a little conservative in my opinion, but you can pick your own portfolio.

His TPA is what is really great. I'd pay just to have her as she runs lots of scenarios on the profit sharing to help keep costs down.

When I do contact him, he is available or gets back that same day.

We did look at some others, but the TPA was able to save enough in the profit sharing that it more than made up for the costs. I haven't gotten a new quote since we started though.

[VagabondMD]

Based on my discussions with him on the forum and what he has written for WCI and elsewhere, he seems reasonable, knowledgeable, practical, and to be an economical choice. If our group were looking to change plans, his firm would be a strong consideration.

[jacksonhole]

Thanks for the feedback.

[mtn2018]

Anyone with any recent experience? I reviewed several of his articles this weekend as my practice is considering a transition and I would be very interested in any feedback. He seems very knowledgeable.

[afan]

No experience with him.

Came across this rather strange thread on WCI

https://www.whitecoatinvestor.com/the-reason-you-take-market-risk/#comment-569395

 

According to his ADV, this is a one-person operation with ~$12M under management. Several small retirement plans and a handful of individual investors with very small accounts.

 

Used to be in Massachusetts. Now in Florida.

[The White Coat Investor]

Known Kon for a long time. His wife designed this forum. He knows what he is doing, knows when to get help from TPAs/actuaries, and specializes in setting up small practice retirement plans, particularly for dentists. Sometimes not the cheapest option but adamantly against AUM fees. I've had a few readers interview him and his competitors and then choose a competitor, but none seemed to think he wasn't a strong competitor in the space.

[legobikes]

Konstantin helped me (through this forum and then through email) to come to grips with our retirement plan. I was shot down, or rather, never got a straight answer why we hadn't hired a fiduciary in the first place, but would have readily had him hired to re-work our plans. As far as I can tell that is not to be, because, you know, Morgan Stanley are so trustworthy!

[The White Coat Investor]

afan wrote:

No experience with him.

Came across this rather strange thread on WCI

https://www.whitecoatinvestor.com/the-reason-you-take-market-risk/#comment-569395

 

According to his ADV, this is a one-person operation with ~$12M under management. Several small retirement plans and a handful of individual investors with very small accounts.

 

Used to be in Massachusetts. Now in Florida.

Click to expand...

The linked comment above is not written by Litovsky, although there are many of his comments posted below that post and elsewhere on the site that might be worth reading prior to hiring him as they explain his thoughts on fees, fiduciary duty, and the value of credentials.

The ADV2 can be found here:

https://www.adviserinfo.sec.gov/IAPD/Content/Common/crd_iapd_Brochure.aspx?BRCHR_VRSN_ID=580896

Relevant fee information is found in the usual place:

Small Business Pension and Profit Sharing Plans

LAM assists small business owners with the set-up and management of retirement plans including SEP IRA, SIMPLE IRA, 401(k) and Defined Benefit/Cash Balance. After assessing the needs of the business, LAM will recommend a particular type of Plan, and the client will be given the choice of custodians, record-keepers and/or Third Party Administrators (TPAs) for the Plan. LAM provides investment advisory services to the plan including Investment Policy Statement creation, discretionary investment management, model portfolio design and employee enrollment and educational seminars. LAM receives no compensation of any kind for recommending a particular retirement Plan, record-keeper or TPA. In providing investment advisory services to retirement plans, LAM acts in an ERISA 3(38) fiduciary capacity.

Compensation

LAM will charge an hourly, per project or a flat retainer fee negotiated with the client, which will be based on complexity and duration of the task. After an initial introductory meeting, Adviser will present a formal Proposal to the client outlining services and fees. Hourly and per project fees are due at the last presentation meeting after the project’s completion. Retainer fees are payable quarterly or monthly at the start of each quarter or month. The fee for the initial quarter or month is due when the Advisory Contract is signed.

Fee Schedule

Hourly fees range from $250 - $400 per hour. Annual retainer fees range from $3,600 - $20,000.

Other Fees

Management fees deducted from all assets invested in mutual funds can be found in the fund’s prospectus. Commission and brokerage charges are also assessed when purchasing individual stocks, bonds, ETFs, and mutual funds.

Additional Compensation

Neither LAM nor any of its supervised persons (employees) accept compensation for the sale of securities or other investment products.

 

Konstantin himself can talk about the numbers under management. He's registered on the forum under litovskyassetmanagement, but mostly just posts comments on the blog.

[spiritrider]

Even though I have disagreed with Kon on an opinion or two over the years*. He is by far the most knowledgeable and detailed oriented forum member on 401k design and administration issues. I wouldn't hesitate to recommend him to at least investigate his services.

I can't really comment on his value proposition, but often you get what you pay for. I am sometimes amused at how physicians of all people are reluctant when it comes to paying other fixed fee professionals what they are worth.

High mutual fund expense ratios and especially AUM fees are a wealth creation drag. However, depending on your particular needs, abilities, desires and time. A solid CPA, fee only CFP and employer retirement plan professionals can be invaluable.

*Kind of like WCI and I. Doesn't mean I don't have tremendous respect for both of them.

[The White Coat Investor]

spiritrider wrote:

Even though I have disagreed with Kon on an opinion or two over the years*. He is by far the most knowledgeable and detailed oriented forum member on 401k design and administration issues. I wouldn’t hesitate to recommend him to at least investigate his services.

I can’t really comment on his value proposition, but often you get what you pay for. I am sometimes amused at how physicians of all people are reluctant when it comes to paying other fixed fee professionals what they are worth.

High mutual fund expense ratios and especially AUM fees are a wealth creation drag. However, depending on your particular needs, abilities, desires and time. A solid CPA, fee only CFP and employer retirement plan professionals can be invaluable.

*Kind of like WCI and I. Doesn’t mean I don’t have tremendous respect for both of them.

Click to expand...

I only know of one ongoing disagreement* that neither your nor I has convinced the other of. Was there something else you corrected me on that I didn't quickly agree you were correct?

* Whether taking online surveys constitutes running a sufficient business to open an individual 401(k).

[litovskyassetmanagement]

Just

afan wrote:

No experience with him.

Came across this rather strange thread on WCI

https://www.whitecoatinvestor.com/the-reason-you-take-market-risk/#comment-569395

 

According to his ADV, this is a one-person operation with ~$12M under management. Several small retirement plans and a handful of individual investors with very small accounts.

 

Used to be in Massachusetts. Now in Florida.

Click to expand...

Actually, I currently work with over 80 plans, and as far as AUM, probably closer to $100M. We do not work with individual investors any longer except for a small number of existing relationships to allow us to concentrate exclusively on ERISA retirement plans. The problem with SEC website is that only regulatory AUM is reported, but not assets that are in participant-directed retirement plans (which are not regulatory AUM). The size of my plans ranges from startup to $30M-$40M Combo (401k and Cash Balance).  Once I update my ADV next year some of this will show up, but AUM will not until I hit about $200M (within a year or two, and this includes participant-directed plans), at which point I would have to register with SEC as a pension consultant.

As far as one person, I have a network of actuaries, TPAs and record-keepers, as well as access to high level ERISA attorneys and CPAs, and because I use some of the best service providers available this allows me to provide advice to plans of any complexity (which in fact is exactly what we do). Most of our plans are doctor/dentist plans, and I primarily work with medical/dental practices. And it does help that I don't charge AUM fees and serve in an ERISA 3(38) fiduciary capacity.

One unique thing about us is that we don't sell a platform, and we can work with any service providers, including TPAs, actuaries, record-keepers, etc.  I believe in open architecture and selecting the best service providers rather than using an established platform.  I am also not a generalist as many advisory firms are, but a specialist, with an emphasis on working with medical and dental practices, and more sophisticated retirement plans such as 401k with profit sharing and Cash Balance/Defined Benefit.  There is just too much sales going on in the retirement plan industry, and not enough fiduciary-led advice, which is what we specialize in. So while many firms would like to sell you a plan, as fiduciaries, we specialize in looking at the big picture and recommending the most cost-effective and appropriate solutions.