401K CASE STUDY

Full-service approach can create seamless 401K oversight

When engaging with Clearstead for retirement plan oversight it is not uncommon that the plan fiduciary is in a role such as the human resources director. Though the fiduciary may be financially savvy and an MBA, they can be too busy with the company’s other HR-related tasks — hiring new employees, overseeing health plans, and mediating conflicts — to tackle the nuances unique to the oversight of 401K plans.

Clients could have used larger firms to manage its plan in the past, but are unhappy with mounting fees and extra costs of a la carte items. We think the Clearstead’s approach is different.

When overseeing a 401K plan, Clearstead applies a time-tested service model customized to meet a client’s specific needs. Despite the size of a plan, there can be no structure in place to monitor a plan’s compliance and performance. We begin by drafting a charter, creating an investment policy, and offering guidelines on how to structure the oversight committee. We also created a fiduciary checklist and scheduled quarterly meetings to offer reports, and custom meeting materials to educate the client on topics of interest.

We believe that our detailed start-to-finish approach is what differentiates our approach from other advisors

Next, Clearstead analyzes a plan’s investments. In addition to an ongoing review and offering recommendations about what investments the plan should offer, we developed a tool to help monitor target date funds. Clearstead also provides oversight to a plan’s unique attributes and managed account service.

Our reporting includes not only the quarterly reports, but also monthly reports, quarterly economic and capital market reviews, customized meeting deliverables, and thought leadership along with other publications.

We also monitor all service providers to the plan, meet with them regularly, update them, benchmark their fees and helped determine whether the fees were reasonable. In cases where they aren’t, we request repricing and also prepare RFPs to find new providers. These services are not a separate project fee, as they can be with other advisors – sometimes to the tune of thousands of dollars.

Lastly, we can help assist the plan’s fiduciaries monitor the overall success of the plan to ensure that the plan participants’ benefit.

Each quarter, Clearstead provides a fiduciary checklist to ensure that all standards are met. Since we ourselves are fiduciaries, we take this role seriously.

Our goal is not only to lower fees, but make sure the plan fiduciaries are better educated and have better structured oversight of their retirement plan. Clearstead’s have a passion for responsible, transparent oversight of the 401K process.

Our proprietary Clearstead Prism OCIO service acts as a powerful extension to institutions, collaborating on a deep level to completely handle day-to-day management of investment portfolios after clearly defining objectives, quantifying risk, and creating benchmarks that continuously explain all results. Research drives our decision making, and we are quantitatively focused — tempered with the qualitative value of decades of experience and practical judgment.

Find Your Clarity

We bring our clients objective financial leadership through our fee-only advisory model, which enables us to remain objective. We do not offer proprietary products and take no commissions from product sales: our only source of revenue is fees we receive for financial advice. True to our founding principles, we do the hard work: the day-to-day investment management integrated with organizational priorities and family aspirations.

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Clearstead is an institutional and private client advisory firm that is relentless in providing solutions so our clients can exceed their aspirations and build stronger legacies for their families, their communities, and themselves.

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