Investment Advisory Service for 401(k) Plan Participants

Transcription

1 Investment Advisory Service for 401(k) Plan Participants Frequently Asked Questions Daniel A. Hughes, CFP, ChFC CERTIFIED FINANCIAL PLANNER professional Chartered Financial Consultant nd Avenue North Suite 100 Jacksonville Beach, FL (904) Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC

2 Make Smart Decisions for Your 401(K) As you are reading this, you are probably many years from retirement. Have you even thought about the subject? When do you want to retire? What would you like to do when you retire? For those wanting to retire anytime in the next twenty to thirty years, there is one very important question you have to ask yourself. How am I going to pay for all of this? Most people would agree that being a greeter at Wal-Mart or an employee at McDonalds during your retirement years is not the most desirable option. In order to help prevent this from happening, you must take prudent financial steps for your financial future. If you re like most people, your 401(k) may represent your largest investment asset. Therefore, how you handle these assets could very well be the most important decision you will ever make concerning your financial future. In spite of this, many take a passive approach to their 401(K) investments, without considering that abrupt changes in the investment environment or economic conditions may substantially affect the suitability of their investment selections. Making investment selections in a retirement plan is often a time-consuming and challenging process. Most people don t have the time, training, or temperament to become investment experts in addition to doing their job. And, while you might get information and education from your 401(k) plan provider and your company, you usually do not get advice. For many employees participating in their company s 401(k) plan, knowing what to choose can be very confusing and mistakes can be costly. Our goal is to help you answer the following simple, yet crucial questions: Which investments should I choose? How much should I invest in each? As economic and market conditions change, when should I make changes and what changes should I make? The bottom line is that your 401(k) plan is your future. Just as you wouldn t ignore your professional future, by passing up job promotions and not staying on top of industry trends, don t ignore your financial future by not monitoring your 401(k). Remember, your 401(k) is one of the best investment tools you have. Don t ignore it or it might not be there for you when you retire. Your financial future could depend on it. How can a 401k investment advisory service help me? Participants in 401k plans have traditionally been underserved by the investment community and only been given vague guidance, in the form of generic investment education materials and asset allocations tools, to help them determine how to position their 401k investments. We believe that 401k plan participants deserve more than a black box, cookie-cutter approach to making investment selections within their 401k plans. It is our belief that many 401k plan participants are in need of quality, unbiased, independent and professional investment advice that is tailored to their individual needs

3 To that end, we offer a personalized service to help 401k plan participants determine the appropriate investment selections to utilize within their plan. We accomplish this by making investment recommendations that are based upon an analysis of current market conditions along with your investment objectives, tolerance for risk, and time horizon. In addition, we believe that on-going monitoring is crucial. A change in any of the above circumstances may necessitate an adjustment to the investment selections we recommend. Further, our recommendations are influenced by our belief that risk management is necessary to balance the often-competing objectives of preservation and growth within a retirement account and can have a meaningful impact to the overall success of an investment strategy. We invite you to discover the difference that professional money management makes. What is your approach to offering investment advice to 401k plan participants? Our approach to offering investment advice to 401k plan participants emphasizes two themes: actively managing exposure to risk and investment selection. Active Risk Management can: Respond quickly to changing markets Seek conservation during downward trends Help determine market exposure Investment Selection can: Help to identify candidates that have intermediate-term strength Provide the opportunity for stability in diverse market conditions We believe that there are periods of time when the risk level associated with the markets are high and conversely, there are times when the risk level associated with the markets are low. As such, when risk levels are deemed to be high, we adjust our tactics to focus on wealth preservation. Alternately, when we believe risk levels are low, we turn our focus toward wealth accumulation. With this approach, your allocation between equities, bonds, and cash will vary with the ever changing economic and market conditions that exist in the world today. How often do you review the investments that you recommend? Daily, we evaluate a wide variety of domestic and international markets to measure and evaluate market risk. The objective is to provide ourselves an overall insight on market direction and performance. We do not make predictions regarding market direction or market activity. Instead, we concentrate on understanding market trends and the level of market risk. From this information, we are then able to review and evaluate individual investment choices and allocation decisions. What types of retirement plans do you work with? We are not limited to 401(k) plans; we also offer our services to individuals participating in 403(b), 457, Simple IRA, TIAA CREF or Federal Thrift Savings Plans. We would be happy to review the menu of investment choices you have through your retirement plan

4 How are you compensated for the investment recommendations that you make? Our fees are spelled out in detail in our Advisory Agreement. Our service is an ongoing investment advisory consulting service for your 401k investment selections and allocation. Advisory fees will be charged quarterly in advance. The initial fee will be calculated from the date of the agreement to the end of the quarter. Subsequent fees will be based upon the total asset value of your account at the end of the previous quarter. A statement of assets being advised on may be requested. Who makes the investment changes in my account? You remain in total control of your 401(k) account, while we advise you on the selection of investments and the recommended allocation. It is up to you to make the actual changes to your 401(k) account upon receiving an updated Personalized Recommendation. You are under no obligation to implement or follow the recommendations or investment advice that is provided to you. The implementation of any portion or all of the recommendations or investment advice that is provided to you is at your discretion. Implementation of only a portion of the recommendation(s) or investment advice may have an adverse affect on the overall objectives of the investment advisory consulting services that are being provided to you. How are your recommendations communicated? Our Personalized Recommendation will be sent to you via or fax. You shall then be responsible for the timely implementation of the suggested adjustments to your account. You maintain control of your own portfolio. The final decision to implement the allocation change is up to you. How often will I receive recommendations via ? We monitor the investment choices and allocation recommendations on an ongoing basis. The frequency of contact is generally a function of changes in the markets. We will notify you when significant changes occur in the overall market and/or the specific investment choices in your 401(k) plan. In addition, you may request an update if you have any changes that may affect your Personalized Recommendation, including but not limited to; investment objectives, risk tolerance, net worth, annual income, and/or investment time horizon. At a minimum, we will provide you with an updated Personalized Recommendation on a semi-annual basis. Will I have to move my account(s)? No, your Personalized Recommendation is independent of your employer and the location of your 401k plan. Your account stays where it is. Our only goal is to deliver quality, unbiased, independent and professional investment advice to 401(k) participants. How do I provide my investment choices to you? We are looking for the complete menu of the investment choices available to you. You can send us a copy of the investment choices via or fax. How do I update my investment choices if the company changes the plan? Please notify us that your plan has changed and provide us with your new menu of investment - 4 -

5 choices. Upon receiving this information, we will modify your profile to reflect your new investment choices, and provide you with an updated Personalized Recommendation. What if I change employers? If this occurs, please let us know and we will make the changes in your profile to reflect your new employer, your new investment choices, and provide you with an updated Personalized Recommendation. What if my 401(k) plan has minimum holding times or other restrictions? We make every effort to provide recommendations that do not conflict with holding times or trading frequency restrictions. (Moderate restrictions, like 7 day, 15 day or even 30-day minimum hold times are usually not an issue.) nd Avenue North, Suite 100 Jacksonville Beach, FL (904) Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC Important Disclosure Information Please remember that different types of investments involve varying degrees of risk, and that past performance may not be indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended by us will be profitable). Please remember to contact us if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services