Products September 18, 2007

AllianceBernstein Helps Advisers Have 'Great Conversations'

AllianceBernstein Investments, Inc. has launched a program that allows financial advisers to leverage proprietary AllianceBernstein research to conduct targeted 401(k) plan evaluations that correspond to the needs of plan sponsors.
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With Great Conversations, financial advisers can walk plan sponsors through five critical tracks for plan evaluation: Strategic Plan Review, Investments, Communications, Fiduciary, and Services, according to a press release.

With each track, the financial adviser follows a three-step process:

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  • Discovery – The financial adviser shares focused defined contribution plan research and gathers information about the client’s needs and goals.
  • Research & Analysis – The financial adviser presents customized “benchmarking’ results and discusses action items with the plan sponsor.
  • Solutions – The financial adviser works with the plan sponsor to implement a set of solutions for improving the plan.

Throughout the process, AllianceBernstein provides consulting support and customized materials for the financial adviser to use with the plan sponsor, allowing the adviser to focus on the client, instead of the preparation.

The firm conducted several research studies with plan sponsors and plan participants to uncover their needs, and the findings of that research serve as the foundation for Great Conversations, the announcement said. For example, during the Discovery and Research & Analysis phases, financial advisors can share relevant defined contribution research with plan sponsors so they can benchmark their plans against the industry.

The program was built for financial advisers with varying needs and business models, serving both advisers who regularly work with retirement plans, and those who occasionally dabble in the defined contribution space. Further, AllianceBernstein has a dedicated group of Retirement Consultants who are training financial advisers on how to incorporate Great Conversations into their practices.

For more information, visit www.alliancebernstein.com.

Data & Research September 18, 2007

401(k) Plans Undergoing Redesign

As the 401(k) plan becomes 'the new retirement superpower,' attention has turned to the weakness of the plans and is leading to 401(k) version 2.0, a research report by Russell Investment Group argues.
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In its recent report, “401(k)s: The Launch of Version 2.0,’ Russell says that as the industry turns its attention to the shortcomings of 401(k) plans, specific areas are receiving significant attention. These areas include: participation rates, contribution levels, investment decisions, fees, and early withdrawals.

Further, as the defined contribution plan has slowly taken on characteristics of the defined benefit plan, income replacement has usurped wealth management as the most important objective of defined contribution plans.

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Version 2.0

The next generation retirement plan is not a savings plan, but instead aims to be a pension plan, Russell says. The Russell Retirement Report 2008 discusses 15 of the most important differences, which are:

  1. Auto-enrollment
  2. Default funds
  3. Brokerage window
  4. Pre-mixed funds
  5. Asset class funds
  6. Education and advice
  7. Asset allocation in the hands of experts
  8. Increased focus on the fiduciary
  9. Fees
  10. On-track reporting
  11. Funding partnership
  12. Implementation efficiency
  13. Post-retirement
  14. Early distributions and borrowing
  15. Company stock

Russell argues that the burden on the defined contribution fiduciary might have seemed less onerous than that of the defined benefit fiduciary, but that misconception is going away with a new generation of 401(k) plans. Fiduciary responsibilities will now include decisions around auto-enrollment, qualified default investment alternatives (QDIAs), brokerage window options, and employee education, to name a few, according to a press release.

“Before our eyes, and at a quite remarkable pace, a new breed of 401(k) plans is being designed, built, tested and launched,” said Bob Collie, director of investment strategy at Russell and author of the Russell Retirement Report 2008, in the press release. “What’s happening is really a redefinition of every aspect of how a 401(k) plan ought to be run, and it all flows from an acknowledgement that these now have to work as retirement provision vehicles and not just savings plans.”

The Russell Retirement Report 2008 can be downloaded at www.russell.com/RetirementReport2008.

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