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  • #16







    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.

     

     

     
    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]

     

     

     
    Click to expand...


    The model in question is a bundled record-keeper model, and everyone uses it - there are many other providers that have identical structure and charge very similar fees.  There is a place for it, and there are many alternatives. While this model is definitely scalable for the provider, it is not the best model for retirement plans that have sophisticated needs (which are most doctor/dentist plans).

    I merely pointed out the drawbacks of such model.  The whole point of this model is to get as many clients paying AUM fees as possible, while low-balling on administrative fees.  Individualized and customized services are not part of this model because there is nobody to provide such service by - the record-keeper has a process (which is basically a conveyor belt, where there isn't one person responsible for everything), and nothing outside of this process is going to be done.  It is the same model used by all of the record-keepers - there is a sales team, and once the sale is made, the plan is handed over to the record-keeper, done.  Nowhere here is a fiduciary who's taking the time to understand the client's needs, perform proper financial analysis, do thorough design studies, and come up with recommendations that are made in the best interest of the client, as well as to provide ongoing services that are not limited to just picking a handful of investments. And when such models use an ERISA 3(38), that's usually an entity behind the scenes that simply picks investments, and often such entities are either subsidiaries of record-keepers, or share revenue with them, so they are neither independent nor unbiased. While this can work for some, I find that this still leaves the plan sponsor in charge of everything because they don't get ongoing advice from their fiduciary adviser regarding many other aspects of their plan, and there is no oversight/interfacing with the TPA by the adviser, because all of the parts in a bundled model work for the record-keeper, so there are no checks and balances as well as out of the box fiduciary advice provided to the plan sponsor.

    The fiduciary model is not scalable - we take the time to do everything right (cost-effectively, I might say because AUM fees definitely cost a lot more than fixed fees in this case), while bundled record-keeper model is very scalable, but this comes at a cost which is paid by the client. So I always recommend open architecture fiduciary model vs. bundled record-keeper one.

    We often find that existing plans need extensive voluntary compliance work, and thorough analysis of plan's architecture and design needs, and such plans can not be just transferred over to a new provider while forgetting everything that came before.  Also, the open architecture model is much better because it allows mixing and matching of various providers, especially if the plan has existing TPAs/actuaries/record-keepers, and it would take a thorough evaluation to determine which providers work best, and which should be replaced.

     

     
    Kon Litovsky, Principal, Litovsky Asset Management | [email protected] | 401k and Cash Balance plans for solo and group practices, fixed/flat fee, no AUM fees

    Comment


    • #17
      Well, this hasn't turned creepy at all....

      There are piles of investor money out there for the taking....  Let's all just agree that the company is very important, has a great celebrity pitchman, already has a tons of cash to fondle, and anyone who says otherwise on this forum will be sued into submission.

      Now if you'll excuse me, I have to go change my screen name and face.

       

      Comment


      • #18
        I am going to (perhaps unwisely) jump in the middle of this crossfire with a somewhat objective (we all have our biases) observation

        Full disclosure: I do not have any association or vested interest in America's Best 401k. I didn't even have any reason to know until this thread that a Tom Zgainer was associated with America's Best 401k. I have never even recommended them as I think there are better options in many cases. If you have to use the name of the company to make a marketing message, "is it really true". Personally, I'm not likely to have a favorable impression of "Honest John's Used Cars" or "Reliable Roofing either."

        Full disclosure: I have disagreed with Ken Litovsky in the past. In fact on different topics I have expressed my opinion that he often engages in the trade of Fear Uncertainty and Doubt (FUD).

        Ken uses every opportunity to disparage bundled 401k providers in a disingenuous manner. He does not allow for the possibility that anything but his one man show is the way to go. Small bundled 401k providers offer very good lower cost 401k options for small businesses. There are many roads to Dublin and fear mongering does not help the WCI community determine their best option. I feel that Tom Zgainer was well within his rights to defend his company against an unfair attack.

        I am now going to walk from the crossfire into direct fire. This is specifically addressed to WCI. Your model is far different than other investment forum. You allow and even encourage professionals and/or advertisers to participate in the forum. I do not question that because I feel that enhances the value to the target audiences, by having knowledgeable professionals respond to complex questions.

        There are many excellent professionals that provide a great value to this forum. However, they do not shamelessly self-promote only their vision and thus product/service. There are particular individuals that I appreciate the level of help they provide to the community. They can be identified by the fact they may very often be giving advice contrary to their self-interests.

        This is just my personal opinion and this is your forum to do with whatever you want. I just believe that people who have a conflict of interest refrain from the promotion of inherent self interest.

        Comment


        • #19
          First, I did not attack a company, but rather the bundled record-keeper model.  I don't care what company is offering it, the same logic applies to every bundled record-keeper out there, and this comes from personal experience working with plan sponsors who come from such platforms. All of my observations come from actual experience working with retirement plan providers, ERISA attorneys, and Third Party Administrators, and at no point would I say something that is knowingly inaccurate.  I'm always very happy to correct myself if I say something that's incorrect because my ultimate goal is to disseminate information has has been ignored by the mainstream providers (such as bundled record-keepers) because that's the model that makes them the most money, and so they won't tell you that better options are available, so I would never knowingly say anything that is wrong or misleading. One may not like it, but they are welcome to argue their point of view, rather than try to shut it down.

          So far I'm still waiting for someone to tell me where my arguments against bundled providers are wrong.  While some providers are definitely better than others, my point is that there are better options out there which are not being presented to plan sponsors because everyone wants to sell them a product and put them into a bundled platform.  Because I personally look for the best solutions out there that are low cost and high quality of service, I am yet to find a bundled platform that does everything as good as an open architecture approach with independent providers at a lower cost.  And I don't share revenue with my providers.  I also happen to work with many different providers, so I have some experience on which to base my discussion of service quality.

          A conflict of interest is when someone is selling a product and is saying that theirs is the best product regardless of what the client needs are.  When someone is providing advice so that someone can go and implement it with any provider, that's not a conflict of interest, that's public service.  As a fiduciary, I base my reputation on the quality of my advice, and if my advice is biased and self-serving, that's not going to get me any favors. Ultimately, anyone is free to do whatever they like and engage any provider they want, but I believe that it is important to exchange ideas and information rather than censor anyone who does not conform to the mainstream, and if someone is bent out of shape because they don't like what they hear, as long as these ideas are delivered in a respectful manner, that says something about them.

           

           
          Kon Litovsky, Principal, Litovsky Asset Management | [email protected] | 401k and Cash Balance plans for solo and group practices, fixed/flat fee, no AUM fees

          Comment


          • #20
            Spirit rider,

            Could you elaborate on forms that you would recommend. Be they bundled or unbundled. For a large practice with lots of moving parts. And for a smaller cash balance plan with smaller set of partners with less than 20 million assets?

            Comment


            • #21




              Spirit rider,

              Could you elaborate on forms that you would recommend. Be they bundled or unbundled. For a large practice with lots of moving parts. And for a smaller cash balance plan with smaller set of partners with less than 20 million assets?
              Click to expand...


              Before making any recommendations someone has to study your particular situation in a lot of detail.  Anybody can throw names around, and I'm not going to deny that bundled can be more convenient (albeit a lot more expensive).  There are tons of different providers out there, however, once you start getting more complex, I would prefer to use the unbundled approach where you actually get good advice first regarding the plan architecture and services, and only then providers are selected based on your specific needs (and obviously, quality and cost).  Plan providers by themselves are not fiduciaries, so anyone will accept your plans.  The question is, what is the BEST setup in your case?  A lot of plan sponsors don't know how to determine that, or how to compare fees and services, so that's also a part of it.  The first step is to get all of your fees in one place.  Then you will need to understand exactly the types of services your plan might need.  Managed 401k portfolio models?  Low cost index funds?  Participant advice for all plan participants?  What about actual financial planning offered by a fiduciary for all participants?  No asset based fees?  Managing Cash Balance plan portfolio using liability-driven approach?  Etc, etc. Then you need to understand what the optimal setup is in terms of services and providers, and who would do what for the plan (so that there is perfect coordination). Then each provider can be selected based on your specific needs. Someone on the plan sponsor side also has to be involved in the decision-making.  A lot of platforms are designed so that you outsource everything to them.  This is impossible with a more complex plan - plan sponsor has to be involved a lot more with a more complex situation, but they also have to be sure that they are getting the best advice from their service providers, and that service providers are working together for their best interest.
              Kon Litovsky, Principal, Litovsky Asset Management | [email protected] | 401k and Cash Balance plans for solo and group practices, fixed/flat fee, no AUM fees

              Comment


              • #22
                Read this thread-
                The conflict seems to be disclosed in Creative Planning ADV including Zgainers increased compensation for wealth management referrals.

                Comment


                • #23




                   

                  I am now going to walk from the crossfire into direct fire. This is specifically addressed to WCI. Your model is far different than other investment forum. You allow and even encourage professionals and/or advertisers to participate in the forum. I do not question that because I feel that enhances the value to the target audiences, by having knowledgeable professionals respond to complex questions.

                  There are many excellent professionals that provide a great value to this forum. However, they do not shamelessly self-promote only their vision and thus product/service. There are particular individuals that I appreciate the level of help they provide to the community. They can be identified by the fact they may very often be giving advice contrary to their self-interests.

                  This is just my personal opinion and this is your forum to do with whatever you want. I just believe that people who have a conflict of interest refrain from the promotion of inherent self interest.
                  Click to expand...


                  I just saw this. What are you suggesting be done? You can PM me if you want.
                  Helping those who wear the white coat get a fair shake on Wall Street since 2011

                  Comment


                  • #24







                    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 removed at poster's request.]

                     

                     
                    Click to expand…


                    We’ll let our legal counsel take it from here
                    Click to expand...


                    Look, I get that you are some kind of hot-shot, but going the "let our legal counsel take it from here" route it not a good look. Show us you are right.

                    Comment


                    • #25
                      Yeah. What were the specific falsehoods? I’ve never wandered into Dentaltown. Teach us.

                      I will say that the involvement of a celebrity spokesperson might make your sales pitch more effective in aggregate but gives me a used car vibe. Maybe that’s unfair but the only thing I know about Robbins is that he does (did?) a firewalking act as part of his live presentations and I think there were news reports about some people getting burned (literally rather than the figurative Edward Jones-type version).

                      Comment


                      • #26
                        I also don’t think this needs to be restrained by WCI. If these gents want to argue all over the interwebs, let them have at it. They’re signing their names to the words.

                        Comment


                        • #27




                          I also don’t think this needs to be restrained by WCI. If these gents want to argue all over the interwebs, let them have at it. They’re signing their names to the words.
                          Click to expand...


                          It does make me a little nervous to see them threatening to sue each other though. This forum isn't worth enough to me to be involved in lawsuits about stuff that gets posted here.
                          Helping those who wear the white coat get a fair shake on Wall Street since 2011

                          Comment


                          • #28







                            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 our legal counsel take it from here
                            Click to expand...


                            As a reminder to forum members, threatening to sue the owners or other members of the forum is not permitted, even if the threat is somewhat veiled. A warning has been issued in this case. Forum policies can be reviewed here:

                            https://www.whitecoatinvestor.com/forums/topic/attention-new-posters-read-before-posting/
                            Helping those who wear the white coat get a fair shake on Wall Street since 2011

                            Comment


                            • #29
                              WCICON24 EarlyBird
                              Tony Robbins was a board member of both Creative Planning and AB401k.
                              The sales strategy, increased compensation, and conflicts are disclosed in the Creative Planning ADV with the rest of the regulatory matters in ADV and IAPD.
                              AB401k runs a regional sales office from the Creative Planning headquarters at 3400 College Blvd and it's on the AB401k website.

                              Comment

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