401(k) | InspiraFS

Posts tagged 401(k)

Online Investment Advice Lacking for IRAs

November 13, 2012 · Filed under Automatic IRA Rollovers, Financial Services, Investment Advice · Tagged 401(k), Automatic Rollover, GuidedChoice, InspiraFS, Investment Advice, IRA

During my nearly 30 years of retirement and financial services experience, I have come to the conclusion that there are 4 types of investors: Do-it-Yourselfers, Validators, Advice Seekers and Do-Nothings.

In the Individual Retirement Account (IRA) world, these four personalities act predictably:

Do-It-Yourselfers generally open brokerage accounts
The Validators want someone to essentially double check their decisions in whatever investment vehicle they choose
The Advice Seekers want to have someone manage the accounts for them
The Do-Nothings never open an IRA unless they are automatically rolled into one

Do-it-Yourselfers and Do-Nothings can easily find a solution. The problem, however, is that the Validators and the Advice Seekers in particular may have difficulty getting the service they desire.

Why do the Validators and Advice Seekers have so much trouble? One reason is that many Financial Advisors will only talk to individuals above a specific dollar threshold. On the Advisor side that tends to be around $100,000 while on the Bank Trust Department side that minimum number is closer to $1,000,000.

Secondly, even if a lower-balance accountholder can actually talk to someone, most firms will not offer true advice; only education and guidance. That may work to a degree for the Validators, but not for the Advice Seekers.

Another reason could be that the questionnaires and tools that are readily available to investors online don’t do enough. While those resources may help you make decisions, they don’t typically help evaluate options fund-by-fund, but rather address what asset classes you might want to invest in. And while retirement-plan participants may receive online advice in their plans and periodic enrollment meetings, that isn’t the case in IRAs.

So what’s my point? Well, I believe this new GuidedChoice IRA will solve the Advice Seekers’ dilemma and potentially address some of the Validators’ needs. Current retirement plan participants who utilize and like the GuidedChoice advice engine will be able to seamlessly rollover their old 401(k) funds into an IRA created and managed by GuidedChoice.

Even individual looking for an online and call center supported advice provider can sign-up for a GuidedChoice IRA. This will be a unique offering in the marketplace and fills a void because the advice is available to any account size.

It will be interesting to see the progress of this new and inventive IRA product.

–Lowell Smith
President | InspiraFS

President Obama, IRAs and the Election

November 7, 2012 · Filed under Automatic IRA Rollovers, Financial Services, Uncategorized · Tagged 401(k), Automatic IRA Rollover, Fee Disclosure, Individual Retirement Account, IRAs, President Obama, retirement

The election is over. President Obama has a second term, and Americans can start answering their phones again. But what does this mean for the retirement and financial services industry, and in particular the Individual Retirement Account (IRA) marketplace?

Because the House of Representatives remains under Republican control, it would appear to be status quo. You would think that would mean no significant changes in the retirement plan industry. However, that is a dangerous assumption.

Other than healthcare reform, most of the significant changes that affected employee benefit programs during President Obama’s first term were a result of regulatory changes. Because the Executive Branch of government has broad powers to interpret legislation through regulation, they can, in some instances, bi-pass the Legislative Branch to make sweeping changes.

We saw this with DOL regulations on Fee Disclosure and Investment Advice during the President’s first term. During that period, we also saw a proposed new definition of a plan fiduciary – extending that designation to commissioned-based financial consultants.

Given the Administration’s penchant to issue regulations, I anticipate at the following:

A reintroduction of the definition of fiduciary that will address the issue of financial advisors to plans cross selling IRA rollovers to plan participants.
The extension of fee disclosure rules in some form to IRAs.

On the legislative front, there has been a movement to modify the 401(k) plan by taxing all contributions and/or lowering the amount an individual can defer annually. There has even been talk of eliminating the 401(k) entirely. Given a Republican House of Representatives, the prospect of radical legislative change in this area is unlikely, but the mere suggestion shows that nothing is off the table.

However, the re-election of President Obama does raise the possibility that the Automatic IRA (a mandatory retirement program for employers with more than 10 employees that do not offer a retirement plan to its workers), may be enacted. There is no major objection on the Republican side to this legislation because the cost is minimal to the employer and this proposal has been part of every Obama budget proposal.

It is too early to tell what actual changes will be coming, but rest assured there will be some. Just like the Bob Dylan song, “I feel a change Comin’ On.”

–Lowell Smith
President | InspiraFS

Inspira Joins WMSI’s Automatic IRA Rollover Program

August 16, 2012 · Filed under Automatic IRA Rollovers · Tagged 401(k), 401k Rollover, Auto Rollover, Automatic IRA Rollover, Force Out, InspiraFS, John Geli, Lowell Smith, Retirement Plans, Rollover 401k, Rollover IRA, Total IRA, Wealth Management Systems, WMSI Marketplace

Wealth Management Systems, Inc. (WMSI) announced today that Inspira is being offered as an IRA Choice within its Automatic Rollover Program, expanding options for record keepers and plan sponsors managing rollover plan assets for missing and nonresponsive participants.

WMSI, the leading provider of rollover services within the financial services industry, and Inspira, the industry’s premier provider of independent IRA services, announced today that Inspira’s Total IRA™ is currently being offered through WMSI’s Automatic IRA Rollover Program. The Total IRA™ option features a competitive guaranteed return in excess of current money market rates which, when offered in combination with WMSI’s expert administration and automated account processing capabilities, will be a winning combination for both record keepers and plan sponsors.

“Total IRA^TM not only offers a default investment that enables even small involuntary accountholders to continue to grow assets but also gives those accountholders the opportunity to diversify that original investment into over 30 mutual funds screened and monitored by an independent investment advisor, ” said Inspira founder Lowell Smith Jr. “Our goal is to focus on the needs of these low balance accountholders, giving plan fiduciaries the ability to feel comfortable in their fiduciary decision to use Total IRA^TM as their Automatic IRA Rollover Solution.”

For WMSI, the partnership expands IRA choices for clients and prospects and provides access to a unique default fund investment.

“Managing the accounts of terminated employees can be a real administrative burden – one that increases plan costs and potential liabilities for plan sponsors,” stated John Geli, WMSI’s Chief Executive Officer. “Our automatic rollover program is designed to alleviate these burdens by automating administration and account opening processes and by offering a choice of IRA options. Through our partnership with Inspira, our clients gain access to an additional, unique automatic rollover option that we can offer to our rapidly expanding client-base.”

About Inspira

Based in Pittsburgh, PA, Inspira was founded in 2002 and provides bundled providers, recordkeepers, third party administrators, financial advisors, affinity groups, broker dealers, CPAs and payroll companies with turnkey, cost-eliminating IRA solutions. Total IRA^TM is a registered trademark of Inspira.

For more information about Inspira, contact:
Mark Fleckenstein
Director of Marketing
InspiraFS, Inc.
markf@inspirafs.com
412-440-6991

About Wealth Management Systems, Inc. (WMSI)

Wealth Management Systems Inc. is the leading provider of technology based rollover services within the financial services industry. WMSI’s platform significantly streamlines the rollover process for participants while addressing the unique needs of IRA Providers, Financial Advisors, TPAs, and Plan Sponsors. Additional information about WMSI is available at www.wealthmsi.com.

For more information about WMSI, contact:
Jacqueline Rynn
Chief Marketing Officer
Wealth Management Systems Inc. (WMSI)
jrynn@wealthmsi.com
203-245-4254

InspiraFS

Posts tagged 401(k)

Online Investment Advice Lacking for IRAs

President Obama, IRAs and the Election

Inspira Joins WMSI’s Automatic IRA Rollover Program

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