CLS Upgrades Open-Architecture Plan Platform

CLS Investments, an investment adviser in Omaha, has upgraded its (k)Star program.

The upgraded (k)Star program from CLS Investments allows plan sponsors to build 401(k) plans from the ground up with multiple service providers—­instead of taking a prepackaged, bundled offering.

According to Todd Clarke, chief executive of CLS, advisers and plan sponsors used to have to rely on a single plan provider to be the best at everything, a feat he termed impossible. The new (k)Star platform addresses this issue, he says, adding that the platform offers active investment strategies specializing in risk budgeting.

(k)Star is offered in partnership with Professional Capital Services, a retirement plan recordkeeper. The solution provides a modular approach to service providers with an array of unbiased options, so advisers can guide plan sponsors through customized investment choices and features for their plan.

Ryan Byrne, vice president of key accounts at CLS Investments in Omaha, cites research from Aon Hewitt that says participants prefer managed solutions. “The majority will look for a managed solution even over a target date, and over online help,” he tells PLANADVISER. “They want someone to do it for them. If they have the solutions [they want] they’re more willing to contribute to the plan.”

The platform also allows CLS Investments to provide 3(38)  fiduciary services to plan sponsors for CLS-managed ETF portfolios and target-date portfolios available through the plan, as well as for the plan’s fund lineup that utilizes mutual funds or ETFs. The (k)Star platform breaks down all costs to the plan and its participants, and also provides a complete outline of 408(b)(2) fee disclosures, overall coverage and support to the plan.

The advantage for advisers, Byrne says, is the simplicity of the solution. “The feedback we were given in the early stages was that it was too difficult,” he says. “We’ve consolidated it to make it simple for the adviser to learn the system … and come into a plan with low cost offerings and fiduciary coverage.”

The partnership leverages Form 5500 data that advisers can use to identify, acquire and service more plans. Byrne explains that the data can be used for apples-to-apples comparisons on cost structure, enabling CLS to come in at much lower cost and add fiduciary protection. 

“Recordkeepers have plan-finder tools,” he says. “Anything that is on the Form 5500, you can do a search for. You can run reports in your backyard. Look for plans that are the same market size but are paying high costs. You find the plan, do a benchmark, comparison and then finish with a proposal.” All the steps are included in the platform’s capabilities.

More information on CLS Investments’ (k)Star is available by emailing