Rocky Mountain Recordkeeper Adds Advisor-Built Funds
401kWire.com -- October 05, 2006 -- Advisors using the ePlan Services 401(k) plan administration platform will soon be able to provide custom investment portfolios for each of their clients. Mark Gutrich, CEO and founder of the Denver-based recordkeeping firm said it has developed the the capability for advisors using the private label version of their online recordkeeping platform to create investment portfolios from multiple mutual funds for each of their plan clients.
The advisors will be able to create a different set of portfolios and allocations for each of their plan sponsor clients if they wish, explained Gutrich. They can also customize how often the portfolios are rebalanced using monthly, quarterly, semi-annual or annual holding periods. Gutrich said the advisor can brand the portfolios and that the portfolios and branding will be carried into the enrollment module on the platform.
"This allows them to do the same thing that they do with managed accounts," said Gutrich. "In our marketplace, this was one of those 'no-brainers'." The firm caters to fee-based advisors who are looking for an open investment platform, he added. For many of those advisors, proprietary funds of funds offered by mutual fund firms lack appeal. Also, the use of custom-built portfolios provides those advisors with a way to add value to their clients, he added.
ePlan Services focuses on providing Web-based recordkeeping and adminstration services to micro-market plans for partner financial services institutions. Those firms are looking for a cost-effective solution for that niche, according to Gutrich. That means that many of the plans on the platform are startups and that the typical plan has just a few hundred thousand of dollars in assets. The provider rolled out the advisor-built portfolio service launched at the end of August with one of its private label partners that Gutrich did not identify. In that case, the partner opted to build the target-date portfolios from exchange-traded funds (ETFs), he said.
"They are very paternalistic and did not want to offer ETFs directly to participants because they did not think the participants would use them correctly," he explained.
Gutrich expects that future users of the service will opt to use open-end mutual funds rather than ETFs for their portfolios. And, while the service is only available to ePlan's private label partners today, he expects that it will eventually be offered to the remainder of its partners.
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