2010 Press Releases

Groundbreaking 401(k) Alternative Announced by Folio Institutional and ABG Carolinas

Low-Cost Folio(k) Eliminates Shortcomings of Traditional 401(k) Plan

03/09/2010

McLean, Virginia – Folio Institutional, a division of online brokerage FOLIOfn Investments Inc., in combination with Alliance Benefit Group Carolinas, the retirement plan recordkeeping and administration firm, today announced the launch of Folio(k)—a revolutionary 401(k) platform whose transparency, customization, simplicity, and low cost allows financial advisors to provide a more effective solution to retirement plan sponsors.

Folio(k)™ is a turn-key 401(k) solution—including custody, trading, recordkeeping, and administration—and is available to advisors for a fee of 95 basis points.

While nearly half of the U.S. working population saves for retirement via a 401(k) account, recent industry and government analysis has found deficiencies in the typical 401(k). Many investors are faced with limited investment choices or do not possess the knowledge to construct a well-diversified, risk-appropriate portfolio of investments. (An October Time magazine cover story called the 401(k) savings system “a financial failure.”)

Target Date Solution

Folio(k) provides a simple solution: Plan sponsors and their advisors can make their primary investment choices from a set of various risk-adjustable, Target Date Folios—pre-designed portfolios of Exchange-Traded Funds (ETFs). These Target Date Folios reflect a far broader level of diversification than traditional target date funds, which focus primarily or exclusively on domestic equities and fixed income and have proven to be costly and insufficiently diversified. The Target Date Folios include allocations to all the major asset classes (including international equities, commodities, and TIPS, in addition to traditional domestic equities and fixed income). Moreover, the Target Date Folios are created with varying risk levels, including conservative, moderate, and more aggressive. Using Target Date Folios as the basic “building blocks,” advisors decide on the best mix and allocation of Folios or other investments to use in their clients’ plans, based on participants’ risk tolerance, investment time horizon, and other factors they may deem appropriate.

Advisors may periodically rebalance account holdings and have the option of using Folio(k)’s updated model portfolio data as a resource. They can rebalance, add or delete securities, or change the weightings—easily across all accounts with one simple click. An entire basket of securities can be traded in one, simple transaction with no commissions, transaction fees, or ticket charges.

Fully Transparent and Low Fees

Folio(k) also eliminates any potential for excessive or hidden investment and trading fees—another hot-button issue for traditional 401(k) accounts. Fees covering all trading, custody, recordkeeping, compliance, and administrative functions total just 70 basis points. Even with the addition of the ETF expense ratios, the total cost is less than 1 percent of plan assets (approximately 95 basis points). This low-cost structure allows advisors to add an appropriate management fee and still offer a bundled 401(k) solution at a highly competitive price.

“Sponsors and participants are asking for more transparency, better diversification, and lower costs across the board.” said Alan Smith, vice president of retirement services at Folio Institutional. “Folio(k)’s customizable portfolios of low-cost ETFs were developed with diversification and cost in mind. Participants actually own fractions of the underlying ETFs in a low cost, easy-to-use, Web-based 401(k). And fees can be deducted from plan assets, so there are no out-of-pocket expenses to the sponsor.”

Completely Web-Based

ABG Carolinas is providing all administration and recordkeeping for Folio(k). The program operates 100% online. Participant enrollment, statements, investment requests, employer reports, and materials are all delivered over the Internet.

Lisa Allen, senior vice president of ABG Carolinas, stated, “Employers are being overwhelmed by administrative complexity and cost of the traditional 401(k) structure. Folio(k) provides a solution. Advisor interest in Folio(k) has been strong, even before the formal introduction of the offering. We are thrilled to join together with Folio Institutional to offer plan sponsors and their advisors a solution for their clients.”

Learn More

For more information about Folio(k), contact Folio Institutional at 888-485-3456 or info@folioinstitutional.com, or go to: www.folioinstitutional.com/foliok/advisors.jsp.

Folio(k) will be the subject of a presentation and discussion on Monday, March 15, in Orlando, during the American Society of Pension Professionals & Actuaries “401(k) Summit.” For details, contact ABG Carolinas at 704-714-2406 or ast@abgcarolinas.com.

Folio Institutional and Alliance Benefit Group Carolinas do not offer investment advice and make no representation, either explicit or implied, regarding the suitability of specific investments, models, or group of model investments, including specifically the Target Date Folios, for individual investors or individual retirement plans. Alliance Benefit Group Carolinas and Folio Institutional are not fiduciaries and the Folios noted are designed solely as examples of low cost, diversified investments. Other investments are available on the Folio Institutional custodial platform. Retirement plan sponsors and advisors should work together to review these investments and monitor them appropriately on an ongoing basis.


About Folio Investing

Folio Investing, a division of FOLIOfn Investments, Inc., is an online brokerage that enables investors to manage stocks, ETFs, and mutual funds as integrated investment portfolios called “Folios” that deliver better control, greater transparency, and lower cost. Investors can create their own Folios, much like creating personalized ETFs or mutual funds, or invest in over 100 Ready-to-Go Folios representing market indices, sectors, geographical regions, target dates, and more. The Folio Unlimited Plan features unlimited commission-free trading in twice-daily windows for only $29 a month or $290 a year. Ready-to-Go Folios can be managed or unmanaged, are not registered investment companies, and are offered by FOLIOfn Investments, Inc., a registered broker-dealer. FOLIOfn Investments, Inc. does not provide investment, tax, or legal advice. FOLIOfn Investments, Inc., is a member of FINRA/SIPC.


About Alliance Benefit Group Carolinas, LLC

For more than 20 years, Alliance Benefit Group Carolinas has been a leader in the employer-sponsored retirement plan industry. ABG Carolinas provides comprehensive solutions for all types of retirement plans, including plan design and document consulting, plan administration and recordkeeping for defined contribution and defined benefit plans, compliance services, correction program assistance, and 403(b) plan consulting. ABG Carolinas is an independent firm and does not sell investments or investment products. More information can be found on the company’s Web site at www.abgcarolinas.com.