FAQ - Atlas 401(k)

Frequently Asked Questions

FAQs

What makes Atlas different from their competitors?

We speak to much of this on the “Our Story” page, but we feel that the core components of our Best-of-Breed product and service offerings makes us different. Offering ETFs over Mutual Funds, Model Portfolio’s over Target-Date Funds (TDFs) and providing Fiduciary Compliance Services such as 3(38) and 3(21) to help both the Plan Sponsor and the Participant make sure they are in fiduciary compliance and getting the right guidance, makes us different and the right choice. We have this flexibility since we are not affiliated or have any allegiance to ANY big brand investment house or banking institutions. Essentially, Atlas acts as the General Contractor and manages all the relationships and coordinates the communication among all parties. We are not bound to any investment house, institutions, quotas or geography. We only want to work with the best clients. The buck stops with Atlas.

What is Open Architecture and why should we insist on that structure?

Essentially, offering an “Open Architecture” feature provides you the greatest amount of flexibility for Asset Choices in your 401(k) Plan. Since Atlas is not beholden to any big or little brand investment house or banking institution, we have the ability to mix and match asset choices to provide the most diverse choices, with low to reasonable fees and equal to or greater performance to its peers. We offer a set asset lineup, but if you have a specific Mutual Fund or ETF that you really like, as long as we don’t already have something equal to or less in fees or equal to or greater in performance, we have the ability to add it into the lineup. Most service providers cannot offer you that flexibility. The power of an Open Architecture format and the flexibility of not being tied to any fund family or investment house. When we review the asset lineup on an annual basis to decide if we need to replace any asset in the lineup, we can essentially offer almost any ETF or Mutual fund from any investment organization.

Why are offering ETFs better than Mutual Funds?

ETFs have become very popular in the last 20 years as they are essentially Mutual Funds, but trade like a stock. You can identify any Mutual Fund in an asset lineup and we can usually find an equivalent ETF, that is significantly less in fees and has equal to or better in performance. The reason why most service providers won’t even offer this is because they can’t make any money off of them. Usually the Mutual Fund has 3-5+ hands in the fee pie being split across several parties. Because it is very difficult to understand who gets what and how much, Mutual Funds are attractive to big brand investment houses and banking institutions. Since there usually is usually no line item of fees on the participants activity, it helps keep the Plan Sponsor and the Participant in the dark most of the time. Also, many times some Plan Sponsor administrative fees are included in the Mutual Fund fees and now that burden is on the participant. This isn’t illegal, but does reduce the participants performance over time since they are now absorbing those fees. ETFs eliminate all of those most of those issues and mitigates your Fiduciary Risk.

Model Portfolios vs. Target-Date Funds (TDFs)?

We offer 13 different custom Model Portfolios to help a participant choose based upon their age and life stage along with their risk profile. This helps them spread out their risk and not think about additional diversification for their 401(k) portfolio if they choose. Every participant has the ability to change their desired model portfolio as they change age brackets or their risk profile changes.

TDFs have been highly criticized because they usually do not follow through on their fund profile or objectives. We have a lot of data and examples to back up the lack of performance behind TDFs. We always ask prospective clients that like TDFs why do you like them? They typically will say its easy for the participants to choose one based upon their desired retirement date. If you read the prospectus on many TDFs, the actual date/year associated with the TDF has nothing to do with a retirement date. You would assume as you get closer to that date then less risk would be taken out of the fund. Is a matter of fact if you look up a TDF that has already past (meaning look up a 2015 TDF). This would mean that if you wanted to retire in 2015 then since we are past that year there should be very little to no risk in that fund. Look up any 2015 TDF and you will find it to be a much different make-up of assets and risk than you would have thought. Go to www.Morningstar.com as a good free resource to research this information.