Broker Check

12800 Whitewater Drive, Suite 100, Minnetonka, MN 55343

952-484-6777
Client Login

Shorewood Wealth Advisors Services

A UNIQUE SERVICING APPROACH Definitive Technology Solutions Inc 401(K) Plan

The Evolution of Employee Retirement Plans

Defined Benefits Plan

COMPANY BENEFITS

  1. Retain Employees
  2. Promote Loyalty
  3. Overfunding Goes to Company

COMPANY CONS

  1. Annual Cost Varies
  2. Company Assumes Market Risk
  3. Manage Assets

EMPLOYEE BENEFITS

  1. Defined Benefit at Retirement
  2. Investment Discipline
  3. Low / No Market Risk

EMPLOYEE CONS

  1. Not Portable
  2. Long Vesting Period
  3. No Flexibility of Investment Options

Defined Contribution Plan

COMPANY BENEFITS

  1. Retain Employees
  2. Promote Loyalty
  3. No Market Risk
  4. Defined Annual Cost

COMPANY CONS

  1. Fiduciary Risks DOL
  2. Fee Analysis
  3. No Investment Discipline

EMPLOYEE BENEFITS

  1. Portable
  2. Short Vesting
  3. Investment Options

EMPLOYEE CONS

  1. No Defined Benefit at Retirement
  1. No Investment Guidance / Discipline

We understand the needs of our clients and satisfy those needs through the following core services

EMPLOYER PROVIDER SEARCH SERVICES

Turn to a trusted advisor for assistance finding the right plan providers. Our efficient process allows us to uniformly and objectively evaluate proposals from quality providers.

EMPLOYER LEVEL SERVICES

Assist you in meeting your fiduciary responsibilities managing the plan administration, reasonable fees, and investment analysis. We‘ll help you manage your needs while providing an efficient and effective retirement plan program for your employees.

EMPLOYEE LEVEL SERVICES

Help your employees make the most of their plan through employee education. As a result of our partnership, your employees will have access to the support they need to make the right decisions.

EMPLOYER : Provider Search Services

The Retirement Plan Consulting Process

The retirement plan consulting process is both simple and efficient. Throughout the entire process, I will be the primary contact and relationship manager. With a clear understanding of your retirement plan needs, we are best equipped to recommend effective solutions that work well together and coordinate all aspects of the process.

EMPLOYER LEVEL: Services

Your Fiduciary Duty

  • Although you’re held to the standard of a knowledgeable investor, you may not have the expertise required to prudently manage your plan’s investments.
  • ERISA policy has also been interpreted to mean that qualified retirement plans, including defined contribution plans, should have established procedures for plan investment- related decision making.
  • The DOL puts it plainly, “Unless they possess the necessary expertise to evaluate such factors, fiduciaries would need to obtain the advice of a qualified, independent expert.” [DOL Reg. § 2509.95- 1(c)(6)]

Our Investment Consulting Process

Our five step process outlines a clear path for our retirement plan clients to follow in order to meet their Fiduciary Responsibilities.

  • Analyze Current Situation
  • Develop Investment Policy
  • Confirm Investment Policy
  • Implement Policy
  • Monitor Investments

FEE ANALYSIS: Support

Fee Reasonableness

Plan Fiduciaries are required to know that the plan costs are reasonable (ERISA 401(a)(1)(B))and, as such, have three basic duties regarding the determination of fees:

  1. Control and account for all investment - related fees and expenses;
  2. Identify every party that has been compensated from plan assets; and
  3. Demonstrate that a determination was made that the fees and expenses paid to each party were appropriate and reasonable, given the level of services rendered.

Fee Oversight

Your fiduciary responsibilities extend to fee oversight in three key areas :

  1. Negotiation of the specific formula and methodology under which revenue sharing will be credited to the plan and paid back to plan or plan service providers
  2. A plan fiduciary will understand the formula, methodology, and assumptions used by the plan providers in arriving at the amounts to be returned to the plan or used to pay the plan providers
  3. Plan fiduciaries must also be capable of periodically monitoring actions taken by the plan provider (to ensure any amounts are correctly calculated and applied)

EMPLOYEE LEVEL: Services

ERISA § 404(c)

“…For almost a decade, a natural experiment has been occurring in the private pension system. In an effort to reduce their fiduciary exposure, millions of plan sponsors have utilized ERISA § 404(c) to transfer investment responsibility to participants. In a 404c plan, participants decide how their retirement plan accounts will be invested among the investment options available under their plan. Millions of plan participants, often without the benefit of investment advice or education, now manage their own retirement assets. Because this development has coincided with a bountiful stock market, its significance has not yet been understood. But the lawsuits are coming, and they promise to transform a rather sleepy section of ERISA into that phrase so familiar to lawyers — “a trap for the unwary. ” — Deconstructing ERISA by Pamela Perun The Urban Institute

ERISA § 404(c)

Asset allocation is the process by which your available financial resources are allocated across a number of “major” asset classes to achieve the optimum return for a given tolerance of risk. Determining the appropriate asset allocation is perhaps the most important investment decision you can make. Numerous academic studies have concluded that “asset allocation is the primary determinant of portfolio return.”

Terms of Engagement / Service

We aim to provide quality service to you and your employees. The following serves to summarize the key elements of such service:

Employer Services

  • Current review of the Plan Providers for cost, flexibility and service. It is recommended this review be conducted every 5 years and documented in your files. If deficiencies are found, we will perform a vendor search using a documented selection process.
  • Current review of Investment Policy Statement (IPS). If no IPS exists, to assist in process of drafting such statement.
  • Provide a review of plan investments. Assist in implementing a documented methodology for selection and monitoring of plan investments.
  • ERISA Consulting Services. We work with our clients to ensure the desired goals of their retirement plan offerings are being met.

Employee Services

  • Employee education. In the first year to provide group educational meetings. After the first year, educational meetings will be conducted as agreed upon.
  • Educate employees on basic investment concepts of asset allocation, diversification, importance of saving and tax deferral.
  • Assist participants in defining appropriate asset allocations which balance risks and return requirements of the individual participant.
  • Assist participants in selection of investment options available within the plan.
  • Assist terminating participants with distribution planning options and ongoing retirement income planning.

Terms of Engagement / Service

We aim to provide quality service to you and your employees. Shorewood Wealth Advisors provides for clear and transparent plan costs.

Cost structure

Fiduciary services

Employer Specifications

Total number of participants:

Type of Plan: 401(k) Profit Sharing

Assets: $2,000,000

Annual Asset Based Advisor Compensation: 0.50%

Disclosure

  • On engagement, Shorewood Wealth will provide a formal Investment Advisory services agreement.
  • Investor Disclosures | Kestra Financial - Industry-Leading Independent Broker Dealer

Frank Macgowan

Shorewood Wealth Advisors, LLC

12800 Whitewater Drive

Suite 100

Minnetonka, MN 55343

952-484-6777

fmacgowan@shorewoodwealth.com