America's Best 401k. Any experience?

[jonce17]

Heard Tony Robbins and Tom Zgainer on a podcast pushing it claiming that fees are eroding American's 401k savings. I don't disagree, though definitely a blanket statement. Reached out to them.

They proposed a plan of low-cost index funds (0.12% average fee) and charge fees of: 0.38% of plan assets plus $1,600 annually.

So total fees = 0.50% assets plus 1,600/yr

Thoughts? It is more expensive than employee fiduciary though they do more wearing all hats: 3(38) fiduciary, custodian, administration, compliance, and advisor.

My concern with working with employee fiduciary is the roles they don't fill and having to figure that stuff out on my own.

[Zaphod]

jonce17 wrote:

Heard Tony Robbins and Tom Zgainer on a podcast pushing it claiming that fees are eroding American’s 401k savings. I don’t disagree, though definitely a blanket statement. Reached out to them.

They proposed a plan of low-cost index funds (0.12% average fee) and charge fees of: 0.38% of plan assets plus $1,600 annually.

So total fees = 0.50% assets plus 1,600/yr

Thoughts? It is more expensive than employee fiduciary though they do more wearing all hats: 3(38) fiduciary, custodian, administration, compliance, and advisor.

My concern with working with employee fiduciary is the roles they don’t fill and having to figure that stuff out on my own.

Click to expand...

Sounds like theyre pushing something they have an interest in. Plenty of very low cost options out there and now people know it.

[White.Beard.Doc]

401k costs are quite high, and this does eat into the returns.  There are 3 different fees that we are currently paying for our 401k:

 

1. Intrinsic fees for the mutual funds that each employee invests in.

2. TPA fees, also known as the third party administrator, who charges our company yearly record keeping fees.

3. Fees for our pension accountant who files our form 5500 and also does fairness testing and advises us on how to remain compliant with the law.

 

This all adds up to quite a bit, more than 1% of invested assets in total between everything added together.  That money could be going back to the investments and add to the returns if there were not so many different fees.

[djohnflatfeecfp]

Zaphod wrote:

jonce17 wrote:

Heard Tony Robbins and Tom Zgainer on a podcast pushing it claiming that fees are eroding American’s 401k savings. I don’t disagree, though definitely a blanket statement. Reached out to them.

They proposed a plan of low-cost index funds (0.12% average fee) and charge fees of: 0.38% of plan assets plus $1,600 annually.

So total fees = 0.50% assets plus 1,600/yr

Thoughts? It is more expensive than employee fiduciary though they do more wearing all hats: 3(38) fiduciary, custodian, administration, compliance, and advisor.

My concern with working with employee fiduciary is the roles they don’t fill and having to figure that stuff out on my own.

Click to expand…

Sounds like theyre pushing something they have an interest in. Plenty of very low cost options out there and now people know it.

Click to expand...

That's part of Tony Robbins' scheme.  He connects with a large RIA, writes a book and just happens to recommend them, and then receives "compensation" based on increased business as a result of his activity.  The tough part is it really isn't widely disclosed.  You decide if there is a conflict.

[The White Coat Investor]

I think that's Zgainer's company.  I don't know Robbin's connection. I think it's a good company. The "best"? Not entirely convinced.

[litovskyassetmanagement]

jonce17 wrote:

Heard Tony Robbins and Tom Zgainer on a podcast pushing it claiming that fees are eroding American’s 401k savings. I don’t disagree, though definitely a blanket statement. Reached out to them.

They proposed a plan of low-cost index funds (0.12% average fee) and charge fees of: 0.38% of plan assets plus $1,600 annually.

So total fees = 0.50% assets plus 1,600/yr

Thoughts? It is more expensive than employee fiduciary though they do more wearing all hats: 3(38) fiduciary, custodian, administration, compliance, and advisor.

My concern with working with employee fiduciary is the roles they don’t fill and having to figure that stuff out on my own.

Click to expand...

The $1600 does not include cross-testing, which is an additional $500 if you want a cross-tested plan.

This is a bundled platform that has significant drawbacks that are common for all bundled platforms:

1) You don't get your own TPA.  You'll be in a pipeline with thousands of other plans, so don't expect anyone to actually provide you optimal plan design analysis of any type of plan design advice (such as how to set your salary properly to max out your contribution while minimizing employer contribution, etc).

2) You don't get your own ERISA 3(38) fiduciary adviser.  You'll get some entity selecting funds, but they won't ever talk with you about investment management or how to use your plan in your best interest to build wealth.

3) You get a participant-directed plan, but I find that most small practices can benefit from having a pooled plan as their first plan:

http://www.dentaltown.com/Dentaltown/Article.aspx?i=393&aid=5411

Not only does this decrease the cost, but also it makes the plan much simpler to operate, at least until you decide to go participant-directed.

4) You pay high asset-based fees which grow with time, and there are other options available that are lower cost that provide significantly more benefits:

http://retirementplanhub.com/retirement-plan-cost-calculator/

There are definitely a lot of things to consider when starting a 401k plan for your practice, and bundled platforms are going to sell you their platform without telling you that you might be a better candidate for a SIMPLE vs. a 401k plan (among other things):

http://www.dentaltown.com/blog/post/3376/small-practice-retirement-plans-how-they-are-different

You can definitely get lower cost option that have no asset-based fees that are taken out of your accounts, and with significantly better services.  One thing that bundled platforms are good at is selling their services.  After the sale is done, you are basically handed over to a huge record-keeper, and you'll be on your own at that point, which is a bad idea.  I think it is better to actually work with a fiduciary rather than with a broker, a TPA or a record-keeper, as they will always work in your best interest and their job would be to make sure that you get the best plan cost-effectively, rather than try to sell you something that is not optimal.

[Tom Zgainer]

 

Jeez.. Kon,

Truly you need to simply stop making inaccurate comments, as you do on Dentaltown. It just is not necessary, you are better than that and you dont need to make inaccurate comments in order to obtain clients. Some of those noted in the prior post are falsehoods. Alternatively any dentist only needs to follow this link to see the factual details regarding your practice:

https://adviserinfo.sec.gov/IAPD/content/viewform/adv102012/Sections/iapd_AdvAdvisoryBusinessSection.aspx?ORG_PK=147647&FLNG_PK=04C03F6A0008018E0005F371007B498D056C8CC0

 

By comparison, to those that started the thread, AB401k has recently exceeded 1000 clients. We are not "pushing" anything. We are among the fastest growing options that exists. Tony Robbins is on our board and more dentists by profession, by a long shot, come to us after reading about AB401k in his bestsellers Unshakeable and Money Master the Game  One only has to take a look at our In the News, and perhaps watch the one from Fox Business 3 weeks ago that is dentistry centric to see that every major financial publication is writing about us:

http://americasbest401k.com/in-the-news/

About 23% of our clients are dentists.  We added over 100 clients the past 45 days. 32 of those are dentists.  We've not lost a client since I founded the company in 2012.  Our advisory team at Creative Planning, (sister company, shared ownership) has over $30 billion in AUM and was recently named by Barrons, again, the #1 independent wealth management firm in the country.  Creative Planning added over $546 million in new assets...in September!.  Clearly this is resonating with the American Public.

https://creativeplanning.com/category/top-ria-recognition/

 

The plan sponsor has A dedicated relationship manager to setup the plan or convert it from the prior providers.  There is a Live participant callcenter.

Kon..please take clear note of this next sentence.  Simply by sending an email to [email protected] any participant at any time receives 1-1 live advice on demand.  Saying otherwise as you suggest is wrong. This notion that you don't "get your own TPA"...is just nonsense. Yes, you do, in a full service solution.  The idea that one must use his unbundled plan with "his" one off TPA, makes little sense that there is only one way to setup a plan.

We have no setup fees.  We have no conversion fees from the prior provider. The annual fee for complete recordkeeping and admin is $1600.  The per participant fee is $28, for a startup plan or existing.  The average core fund lineup expense ratios are 0.12%.  Custody of assets is 0.08%.  Our 3(38) advisory fee is 0.30%.  That equals 0.50% or less, total investment related fees.  Less because a number of the funds have expenses under 0.10%.

None of this to suggest that any company is the best fit for anyone.  We just have one ************************ of a lot of dentists that are thrilled they selected AB401k.  Ask Ace Goerig of Endomastery.  Ask Dr. Craig Spodak in Delray Beach FL, who has become an ambassador as a result of his experiences.  Ask Dr. Richard Boyd who had me speak to the South Carolina Dental Association.  And hundreds more.

 

 

 

 

[litovskyassetmanagement]

While we are not a retirement plan mill, we have about 50 clients in 20 states, and nothing I said above is actually wrong. Our business model is fiduciary/best interest one, and yours is sales-based one. You sell one platform only, and we set up a plan based on open architecture approach where we use the best components, and there is no way your approach can come even close to what we do. We provide advice, and you sell your platform - and maybe what you sell can work for some docs, but it is by no means the best solution for many of them, especially if they have significant assets or sophisticated needs.

1) Advice you get 1 on 1 does not come from a fiduciary who provides advice directly to the plan sponsor regarding their plan.  That's non-existent with this platform (or any other platform for that matter).  We actually offer business level fiduciary advice to plan sponsors rather than sell them a plan that might not be optimal.

2) Advice you get will not include SIMPLE vs. 401k side by side comparison, or whether a Cash Balance plan would work well for their practice.

3) There won't be any compliance advice on affiliated/controlled groups.

4) There won't be any advice regarding brokerage windows and any ERISA issues.

5) There won't be anyone providing comprehensive retirement plan advice that takes into account all aspects of plan sponsor's retirement plan needs - this is the #1 service that is very valuable to plan sponsors with sophisticated needs.

Once the sales pitch is over, you are basically working with Lincoln Trust, which is just a large record-keeper, nothing special.  For that matter you can work with any other record-keeper out there, as well as your own TPA and your own ERISA 3(38) fiduciary, and save money in the process, but most importantly, get a much better services for your plan. The key for doctor and dentist plans is customization, but you'll get none of that with a bundled one-size-fits-all platform because that's simply not their business model.

Most record-keepers like Lincoln Trust have a tiny percentage of custom-designed profit sharing plans, and most of their plans are run of the mill safe harbor.  One hundred percent of our plans are profit sharing, and we have vast experience in optimizing plan design, which is not something you can expect from a conveyor belt record-keeper with a handful of TPAs for thousands of clients.

[Edited at poster's request.]

 

 

[Tom Zgainer]

Kon Litovsky wrote:

While we are not a retirement plan mill, we have about 50 clients in 20 states, and nothing I said above is actually wrong. Our business model is fiduciary/best interest one, and yours is sales-based one. You sell one platform only, and we set up a plan based on open architecture approach where we use the best components, and there is no way your approach can come even close to what we do. We provide advice, and you sell your platform – and maybe what you sell can work for some docs, but it is by no means the best solution for many of them, especially if they have significant assets or sophisticated needs.

1) Advice you get 1 on 1 does not come from a fiduciary who provides advice directly to the plan sponsor regarding their plan.  That’s non-existent with this platform (or any other platform for that matter).  We actually offer business level fiduciary advice to plan sponsors rather than sell them a plan that might not be optimal.

2) Advice you get will not include SIMPLE vs. 401k side by side comparison, or whether a Cash Balance plan would work well for their practice.

3) There won’t be any compliance advice on affiliated/controlled groups.

4) There won’t be any advice regarding brokerage windows and any ERISA issues.

5) There won’t be anyone providing comprehensive retirement plan advice that takes into account all aspects of plan sponsor’s retirement plan needs – this is the #1 service that is very valuable to plan sponsors with sophisticated needs.

That’s just for starters.

Once the sales pitch is over, you are basically working with Lincoln Trust, which is just a large record-keeper, nothing special.  For that matter you can work with any other record-keeper out there, as well as your own TPA and your own ERISA 3(38) fiduciary, and save money in the process, but most importantly, get a much better services for your plan. The key for doctor and dentist plans is customization, but you’ll get none of that with a bundled one-size-fits-all platform because that’s simply not their business model.

Most record-keepers like Lincoln Trust have a tiny percentage of custom-designed profit sharing plans, and most of their plans are run of the mill safe harbor.  One hundred percent of our plans are profit sharing, and we have vast experience in optimizing plan design, which is not something you can expect from a conveyor belt record-keeper with a handful of TPAs for thousands of clients.

[Edited at Poster's Request.]

 

Click to expand...

We'll let our legal counsel take it from here

[litovskyassetmanagement]

This came from the 2015 disclosure:

"ABK functions as the 3(38) fiduciary on behalf of America’s Best 401(k) clients. For providing this service, America’s Best 401(k) shares client fees with ABK. Mr. Thomas Zgainer, founder and owner of America’s Best 401(k), is an associated person of ABK, and subject to ABK’s compliance program. Additional information concerning Mr. Zgainer can be found on Form ADV, Part 2B."

 

 

[litovskyassetmanagement]

And this is from the recent disclosure from 2017:

"Creative Planning has formed a relationship with America’s Best 401k which also provides administration
and record keeping services for qualified retirement plans.
America’s Best 401k provides non-investment adviser functions (i.e. non 3(38) and 3(21) investment
management services) such as plan document preparation, participant enrollment, education and support
services, service provider due diligence/analysis and other vendor support/analysis services. Year end
discrimination testing, Form 5500 preparation as well as other services agreed to with clients are
available.

Creative Planning has a three percent (3%) ownership stake in America’s Best 401k and is also the
preferred investment adviser firm recommended by America’s Best 401k. Clients of America’s Best 401k
that need or request an investment adviser will be referred by America’s Best 401k to Creative Planning.
Such clients are not obligated or required to retain Creative Planning as an investment adviser, but are
encouraged to do so to take advantage of the confluence and synergy of services offered through
Creative Planning and America’s Best 401k. Creative Planning may also refer its clients in need of
retirement plan consulting and administrative services to America’s Best 401k, but such clients are not
obligated or required to work with America’s Best 401k.

Fees charged by clients that work with America’s Best 401k and Creative Planning will be split between
the two firms. Although the firms share fees, services provided are separate and distinct. Therefore,
clients must enter into an agreement with America’s Best 401k and a separate agreement with Creative
Planning. Although the two companies do not share employees, America’s Best 401k maintains its
Regional Sales Office at the same office building as Creative Planning’s principal office location.
A separate entity is selected to act as the custodian to execute trades placed over the website. LT Trust
Company is the preferred record keeper/custodian of America’s Best 401k due to their ability to maintain
a daily valued platform with a direct link to trades placed online."

 

[litovskyassetmanagement]

Tom Zgainer wrote:

Kon Litovsky wrote:

While we are not a retirement plan mill, we have about 50 clients in 20 states, and nothing I said above is actually wrong. Our business model is fiduciary/best interest one, and yours is sales-based one. You sell one platform only, and we set up a plan based on open architecture approach where we use the best components, and there is no way your approach can come even close to what we do. We provide advice, and you sell your platform – and maybe what you sell can work for some docs, but it is by no means the best solution for many of them, especially if they have significant assets or sophisticated needs.

1) Advice you get 1 on 1 does not come from a fiduciary who provides advice directly to the plan sponsor regarding their plan.  That’s non-existent with this platform (or any other platform for that matter).  We actually offer business level fiduciary advice to plan sponsors rather than sell them a plan that might not be optimal.

2) Advice you get will not include SIMPLE vs. 401k side by side comparison, or whether a Cash Balance plan would work well for their practice.

3) There won’t be any compliance advice on affiliated/controlled groups.

4) There won’t be any advice regarding brokerage windows and any ERISA issues.

5) There won’t be anyone providing comprehensive retirement plan advice that takes into account all aspects of plan sponsor’s retirement plan needs – this is the #1 service that is very valuable to plan sponsors with sophisticated needs.

Once the sales pitch is over, you are basically working with Lincoln Trust, which is just a large record-keeper, nothing special.  For that matter you can work with any other record-keeper out there, as well as your own TPA and your own ERISA 3(38) fiduciary, and save money in the process, but most importantly, get a much better services for your plan. The key for doctor and dentist plans is customization, but you’ll get none of that with a bundled one-size-fits-all platform because that’s simply not their business model.

Most record-keepers like Lincoln Trust have a tiny percentage of custom-designed profit sharing plans, and most of their plans are run of the mill safe harbor.  One hundred percent of our plans are profit sharing, and we have vast experience in optimizing plan design, which is not something you can expect from a conveyor belt record-keeper with a handful of TPAs for thousands of clients.

[Edited at poster's request.]

 

Click to expand…

 

 

 

 

 

 

 

 

 

[Eagleeyes]

Boom!!!

[Jaqen Haghar MD]

I'm going to invent a psychological test for CEOs, CFO, COOs, and Presidents of Superpower Nations, and such, that gives the probability of that person getting into random fights on internet forums and social media, and then recommends the specific "parental control" settings for their computers.   

[Tom Zgainer]

Kon Litovsky wrote:

While we are not a retirement plan mill, we have about 50 clients in 20 states, and nothing I said above is actually wrong. Our business model is fiduciary/best interest one, and yours is sales-based one. You sell one platform only, and we set up a plan based on open architecture approach where we use the best components, and there is no way your approach can come even close to what we do. We provide advice, and you sell your platform – and maybe what you sell can work for some docs, but it is by no means the best solution for many of them, especially if they have significant assets or sophisticated needs.

1) Advice you get 1 on 1 does not come from a fiduciary who provides advice directly to the plan sponsor regarding their plan.  That’s non-existent with this platform (or any other platform for that matter).  We actually offer business level fiduciary advice to plan sponsors rather than sell them a plan that might not be optimal.

2) Advice you get will not include SIMPLE vs. 401k side by side comparison, or whether a Cash Balance plan would work well for their practice.

3) There won’t be any compliance advice on affiliated/controlled groups.

4) There won’t be any advice regarding brokerage windows and any ERISA issues.

5) There won’t be anyone providing comprehensive retirement plan advice that takes into account all aspects of plan sponsor’s retirement plan needs – this is the #1 service that is very valuable to plan sponsors with sophisticated needs.

That’s just for starters.

Once the sales pitch is over, you are basically working with Lincoln Trust, which is just a large record-keeper, nothing special.  For that matter you can work with any other record-keeper out there, as well as your own TPA and your own ERISA 3(38) fiduciary, and save money in the process, but most importantly, get a much better services for your plan. The key for doctor and dentist plans is customization, but you’ll get none of that with a bundled one-size-fits-all platform because that’s simply not their business model.

Most record-keepers like Lincoln Trust have a tiny percentage of custom-designed profit sharing plans, and most of their plans are run of the mill safe harbor.  One hundred percent of our plans are profit sharing, and we have vast experience in optimizing plan design, which is not something you can expect from a conveyor belt record-keeper with a handful of TPAs for thousands of clients.

[Post edited at poster's request.]

 

 

Click to expand...

 

We'll let channels outside of this board address the inaccuracies of the prior posts formally. What we do find unusual is that this thread started with a dentist asking an opinion about ABK, and Kon felt the need to attack our model in reply. To try and gain clients? The posts above, we're shaking our heads, it's so inaccurate throughout.

We really are not sure of the base reason for that since both models, (Kon's and ours) espouse low fees, fiduciary support, solid investment options, and an adherence to effective plan design.  We are in truth on the Same side. The differences are that AB401k has built a national brand with over 1000 clients and will surpass $1 billion in assets under management in January, while Kon has built a solid practice working for himself solo with 50 or so clients that he can support. This does not mean that one model, or our model, is the model.

Rather it seems the real argument if one might need to be made when discussing 401k providers would be toward those plans offered via brokers, insurance company and payroll companies.  Those are the plans that are truly robbing the retirement savings of Americans.  Not what we or Kon offers, or other fine 401k options out there that also have their hearts in the right place.

This however was a fantastic refresher for us to no longer engage in such back and forth. This particular thread was for dentists to engage in opinion, not provider opinion. We can't expect all 50K plus dentists with 401k plans to use AB401k (maybe just 45k!!). Going forward, unless asked something directly, we'll just observe the commentary, learn from them and use them for CANI (Constant and Never Ending Improvement)

We're not hard to find, and I'm happy to address any questions directly.

[email protected]