Exploring Special Plan Types (ESOP, kSOP, MEP, MET)
401 harmony
1.
2. 401 Harmony Aspires to Provide the Retirement Planning for the Neglected
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
<10000
10k-20k
20k-30k
40k-50k
50k-60k
60k-70k
70k-80k
80k-90k
90k-100k
100k-200k
>200k
401k Number of Participants by Individual Asset Size Source: EBRI
Traditional Personal Advisor who invests to acquire a customer gets his money back in
12 Yrs
Robo Advisory Service that invests to acquire a customer gets its money back in
6+
Yrs
401 Harmony that invests to acquire this customer will get its money in
1.8 Yrs
33 MM
9 MM
10 MM
Traditional Personal Advisor who invests to acquire a customer gets his money back in
0.7Yrs
Robo Advisory Service that invests to acquire a customer gets its money back in
1.4
Yrs
401 Harmony that invests to acquire this customer will get its money in
1.8 Yrs
Traditional Personal Advisor who invests to acquire a customer gets his money back in
4 Mth
Robo Advisory Service that invests to acquire a customer gets its money back in
1
Yrs
401 Harmony that invests to acquire this customer will get its money in
1.8 Yrs
Neither Personal Financial Advisor Nor newly formed Robo Advisors can serve the neglected based on their current business model
3. How do we do it?
•We provide software as a service tool for 401k investors. We do not manage their money
•Therefore, Employer can make decision to purchase the software tool for all of their employees (whether they pay it or charge back to the employees)
•We will undertake their obligation to educate 401k employees
•In return we charge a very small fee per month per employee for our service
4. How are we different?
Advisor
Fee
Customization of Service
1%
0.5%
0.0%
Advantage
Free
Disadvantage
Identify need but no plan
Advantage
Use Age as the only factor
Disadvantage
Do not consider Risk, need, or contribution
Advantage
Risk Based (may use age)
Disadvantage
Do not consider need and contribution, High Fees
Advantage
Use Age, Risk, and some may consider need
Disadvantage
Too expensive for most 401k participants
Advantage
Use Age, Risk, Need, and Contributions
Disadvantage
Requires users to act on the advice
Advantage
Looks at all needs like insurance, etc.
Disadvantage
Most expensive
Personal Financial Advisor
Packaged Funds
Free Calculators
5. What is under the hood?
•We use an optimization program to come up with asset allocation for each individual
•Three factors decide individual’s asset allocation
–His return requirement based on this current salary, retirement year, salary increase, longevity, and social security
–Historical Diversification of asset classes using probability of loss
–Individual’s own appetite to take risk
•We select funds on 7 attributes broadly in three categories
–Fund’s historical “fee adjusted returns against a benchmark”
–Fund’s historical risk taking
–Consistency of performance in both up and down markets
6. What is included in our service?
•24*7 Access to our website with unlimited use, quarterly rebalancing
•Quarterly Webinars and Onboarding training to train employees to use material
•Access to customer service representative
9-5CST (M-F)
•Access to all future development in our product
7. Benefit of using 401 Harmony
•Personalized Retirement Advice
•Increase 401k participation -> secured Retirement
•Improve Returns through Rebalancing
•More money for Retirement
•Employee Retention and Recruiting
•Meet 401k obligations to educate employee
•May help in meeting Section 3 38 Compliance
•Could be Free - You can pass on the cost to employees account
8. How do employees sign up?
•Company provides us email list
•We create user accounts
•We invite users for online onboarding webinar
•Each Employees agrees to our TOFU (Terms of Use)
•Each employees finishes the session with his/her own plan
