For many years we have helped our clients manage their workplace retirement investments as best we can during their working years. Of course, a primary service we provide to clients is managing their non-workplace investment accounts. Once a client retires or changes jobs, they often take advantage of our services and expertise by rolling over their 401(k) into an IRA for us to manage. A client typically notices a much broader choice of investments in a managed account with Strategic Planning than in their 401(k) options. We focus on varying degrees of maximizing gains and reducing volatility for them.

Unfortunately, a client is usually limited in their investment choices inside of an employer plan; however, we absolutely want them to utilize that employer benefit. The private marketplace does not offer a contribution matching program like an employer. Therefore, it makes sense to take advantage of the employer’s matching. After all, why leave free money on the table? Once someone leaves a job, the primary benefit of the 401(k) goes away. You no longer work for them, so they will no longer pay you. So, it begs the question: should you stay in the 401(k) plan?

It is at this point you can utilize the benefits of moving to a managed account. During those working years however, we have always taken a proactive approach to help you manage the employer’s plans as best we can. We have done this by creating custom investment allocations based on the limited menu of investment options. We believe this is better than trying to guess and pick your own or use preset “target date” or “life cycle” allocations. Those preset portfolios do not consider recent economic conditions, or your exact preferences.

For years our clients have sought our advice on allocating their 401(k) or other employer retirement investments. What happens though if the employer’s investment options are not all that great? We have seen it many times. We do our best with the limited options but sometimes it feels like putting lipstick on a pig. The investment options can be subpar and there is only so much we can do. A familiar infomercial line comes to mind, “there’s gotta be a another way!”

Well, now there is. There is an exciting development in the 401(k) industry. If you are not satisfied with the core investment options, many employers have another option. Some are allowing you to transfer your balance to a self-directed account within the 401(k) architecture. Charles Schwab has been a leader in this field. Employers are increasingly offering the Charles Schwab Personal Choice Retirement Account (PCRA).

With this option, your balance moves to the PCRA side of the 401(k) and you are now able to choose from an enormous list of investments. But what if you are unsure about building and managing your own investment model? What if you could hire your trusted investment firm to do it for you? Well now you can. Clients who utilize the Schwab PCRA, can turn over the management to Strategic Planning Group.

We see this as a long-awaited proactive improvement to 401(k) management. We can now build robust and fully customized investment models for PCRA participants. Some of the employers, just to name a few, who offer this are the State of Utah, Intermountain Healthcare, Home Depot, along with many more.

We will still utilize Fidelity Institutional as a custodian for our clients. Charles Schwab is simply a secondary custodial option which will greatly benefit those who can participate in the Personal Choice Retirement Account.

There is an investment management fee for us to manage your PCRA. As always, the fee is very competitive and we strive to have it be cost neutral. What I mean by that is we strive to get better results, net of the fee, than you would get on your own or with a competitor. The PCRA management fee follows the same transparent and honest approach of our current platform: if your balance goes up, we get a pay raise if your balance goes down, we get a pay cut. This intrinsically ties our interest to your own. We sincerely care about our clients and want them to succeed. To that end, our compensation is affected by your outcome. We do not have hidden compensation or agendas.

Many of our clients have expressed interest in utilizing this new strategy for their 401(k). The first step is to check if your employer offers the Charles Schwab Personalize Choice Retirement Account (PCRA).

We can help check your eligibility. It is a streamlined and easy process. Call our office if you have questions or interest about this option. If your employer does not offer the Schwab PCRA, we can use this as an opportunity to help you review your 401(k) allocations.

I would like to end my article by thanking you for being a client. We love what we do. We serve our clients and strive to do right by you. If there is a new strategy or tool to be utilized, we will always pursue it and evaluate its potential benefit for our clients. If you are ever considering a new strategy or have questions or concerns, please do not hesitate to call us. Do not wait until your next review. We are always here, on-call for you.