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Our 7-Person Investment Committee Has Your Back

12/08/2009:

In a typical 401(k) plan, the owner or designated plan sponsor for your company plan is responsible for selecting the funds to be offered in your plan. Your financial provider may or may not help you choose the funds. When they do help, it seems high expense funds are all too commonly suggested.

Even worse, the plan sponsor often takes on all the fiduciary risk for your company’s 401(k) plan offering. The problem is most employers are not financial industry experts and are put in the position to be one in establishing and managing their 401(k) plan.

To minimize these issues employers face, we share the fiduciary risk with every ShareBuilder 401k customer. The ShareBuilder Investment Committee consists of seven investment professionals that review the ShareBuilder 401k fund offerings and model portfolio allocations at least quarterly. In addition, we employ outside firms to further review our investment programs.

When we originally set out to develop a better 401(k) plan for any size office in late 2005, we chose to take what continues to standout as a unique, and we believe powerful, approach. Selecting index funds comprised of a preset line-up of exchange-traded funds (ETFs) that cover all major asset classes plus a money market was and remains a refreshingly different 401(k) program.

We selected ETFs due to the low expenses and historically strong performance of index funds. We believe an indexing approach where the funds and model portfolios are continually reviewed by an expert Investment Committee is not only the right thing to do, but a great thing that is far too rare in the industry.

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