Case Study

Background:

Navigant Advisory Group approached a company with approximately $15 million of 401K fund assets. The company had recently changed their 401K plan and investment options, and the CEO was disappointed with the results. He requested a complimentary professional evaluation of the plan, including costs and participant results, with recommendations to improve both.

Approach:

Navigant Advisory Group utilized their YFRAME ( Your Fiduciary Responsibility and Management Evaluation) service to conduct a thorough review of the company’s plan. They uncovered the following issues:

• The company had complete legal liability for the 401K plan, but was not aware of that fact.
• While disclosures had been made, the information was neither explained nor understood.
• The broker was paid over $50,000 in commissions for changing the plan, plus ongoing commissions which included 0.5% of deposited funds and additional compensation on asset levels.
• Employees received no additional benefit from the plan change. They paid these expenses out of their funds, but received no investment advice as the broker was legally prohibited from doing so.

Solution:

Navigant Advisory Group reached out to its network of preferred providers and in partnership with them presented solutions to the client. A financial advisor from our professionals network was chosen to pick a provider that would take on fiduciary responsibilities and liability for investment decisions.  Ongoing program management would be reduced by over 30%, with improved personalized service, investment options, and quarterly reviews. Interested employees could receive specific investment advice at program launch and as requested over time. Fees were decreased by 25% and the cost of the services for the client was paid by the selected provider.