Responsibilities of Plan Sponsors

December 8, 2016

Soltis recently was asked to comment on some of the things plan sponsors should consider when reviewing the efficiency of their plan’s adviser. 

  • Fees - Plan sponsors have a fiduciary obligation to review the fees of all providers for their plan.  Unfortunately, our experience is that most plan sponsors don’t have the expertise to fully engage in this effort.  With all of our plan clients, we conduct this type of review every 18-24 months.
  • Plan Metrics - Most plan sponsors typically look at participation and deferral rates.  However, a challenge for many of them is to understand “income replacement” ratios.  This data really tells plan sponsors how effective the 401k benefit is to their employees. 
  • Fiduciary Support – The ERISA law is quite complex and constantly changing. Most plan sponsors will lean on their providers to ensure that they are in compliance. Most recordkeepers are not fiduciaries and most consultants do not take on fiduciary status either. It is critical for plan sponsors to understand that the liability for compliance falls on them unless they are working with an advisor who can be the fiduciary and relieve the sponsor of some of the compliance burden.
  • Effectiveness – Plan sponsors should insist that their advisors monitor and benchmark plan providers.
  • DOL Rule – Plan sponsors should fully understand how the new rule impacts their current providers. It will dramatically change how and who will consult with 401(k) plans going forward.

Serving as a fiduciary to a retirement plan requires care, skill, prudence, and diligence. It requires a level of knowledge in investment matters and a solid understanding of ERISA requirements. Plan fiduciaries that are not qualified to fulfill their duties as an expert in all types of investments can select qualified independent experts, like Soltis Investment Advisors. Plan sponsors can then shift responsibility to Soltis as an Expert Fiduciary under ERISA Section 3(21) and ERISA Section 3(38).


The Fiduciary Standard, Plan Sponsors and the Proposed Department of Labor Regulations

July 28, 2016

Soltis was founded on the principle of non-conflict-of-interest – for all of our clients. We are a fee-only SEC Registered Investment Advisor by charter and ADV filing. We do not receive any compensation except the fully disclosed fee from our clients.

We are a fiduciary under ERISA 3(21) and ERISA 3(38) by our contract with plan sponsors, and are subject to the best interest standard of loyalty. Soltis is also Certified by the Center for Fiduciary Excellence (CEFEX), which requires compliance to the Fiduciary Standard of Conduct under ERISA: Loyalty & Best Interest of Participants.

DOL Regulations

The new proposed Fiduciary Regulation requires any person that provides investment advice or recommendations to an employee benefit plan, plan fiduciary, plan participant or beneficiary, IRA, or IRA owner, to be a fiduciary. A plan advisor must follow the fiduciary standard of conduct under the Employee Retirement Income Security Act (ERISA), which says that advisors may only offer advice that reflects loyalty to the “best interests” of plan participants and beneficiaries, and must disclose any potential conflicts of interest.

Currently, many advisors associated with mutual fund, brokerage and insurance firms that administer 401(k) and similar workplace plans are held to a “suitability” standard, under which they can recommend investment products that are deemed to be broadly suitable for their clients but that may reward the advisors through conflicted backdoor payments or hidden fees.

Facts for plan sponsors to keep in mind when considering this new regulation

  • The employer and any board, management or staff committee involved in decision-making for the plan are already fiduciaries, obligating them to adhere to participants’ best interests when selecting and monitoring plan investments and service providers.
  • Certain financial advisors, including broker-dealers, insurance agents and mutual-fund firm representatives, generally have not been subject to fiduciary liability under the fiduciary standard.
  • Under the new rule, nearly all the types of advisors that a plan would rely on to provide investment advice to plan sponsors and plan participants will now be held to the “fiduciary” standard.
  • Advisors with variable fee structures will need to provide plan fiduciaries, participants, beneficiaries, and IRA investors with a Best Interest Contract Exemption (BICE) disclosure detailing their pay, fiduciary status, and that the advice provided is in the best interest of the investor. Level and fee only Advisors are subject to a simplified BICE that requires only a disclosure that details that the advice is in the best interest of the investor.

Important actions for plan sponsors to take

  • Ask your financial services advisors: ‘Are you a fiduciary to my plan by contract?’
  • Request a copy of the ERISA 408b-2 notice to verify that the fiduciary status/standard of conduct is in compliance with the requirements of this regulation.
  • Because some financial firms have operations under the fiduciary standard and other operations that are not, “The only way to be sure if [those providing investment advice] are fiduciaries is to find out if they are a Securities and Exchange Commission registered investment advisor” (RIA) under the Act of 1940.
  • Determine if your advisor to the plan receives variable compensation, has a conflict of interest, or receives backdoor payments, commissions from funds and/or hidden fees for the retirement investment advice provided?
  • Request that your advisor complete the 2005 DOL questionnaire regarding tips for fiduciaries in selecting and monitoring Pension Consultants.


Planning for Retirement

 June 15, 2016

When we talk with clients about retirement planning, what we’re actually talking about is pursuing life’s most important endeavors. Knowing what those are is really the first step in planning for retirement. What kind of lifestyle do you want to be enjoying, both in the short term and the longer term? Do you want to travel? Spend more time with family? Volunteer with charitable organizations?

The next step is thinking about your resources and how you will cover basic needs, health care costs and your “wants.” If you don’t think you have the resources to cover everything, what are your top priorities, once basics and health care are addressed.

Finally, this is the point when you can do a form of scenario planning by asking yourself these questions:

  • What if you work a little longer at your current job, or get a part-time position after retirement – how would that impact your nest egg?
  • What if you sell your home or get a reverse mortgage?
  • Can you make catch-up contributions to your retirement accounts?
  • Do you have other tax-advantaged savings options such as a Health Savings Account or spousal IRAs that you can take advantage of?
  • What is the best strategy for you to use for claiming Social Security benefits?

Many of our clients can readily do the “what if” type of planning, but they rely on our expertise to help with modeling and stress-testing the financial assumptions of for their chosen scenarios.  


Legacy Planning and Family Meetings 

December 21, 2015

At Soltis, we work with a number of wealthy families. While some of their needs are the same as those faced by all of our clients – portfolio construction and management, tax planning, estate planning, etc. – we also help them with legacy planning to ensure that future generations can effectively manage the family’s resources. One of the first things we do is work with the wealth creator(s) to establish a Family Heritage Statement, which explains who the family is, how the wealth was created, and defines the family’s purpose and vision. We then help them develop a Family Constitution, which establishes the family council and their governing values, philanthropy initiatives and, in some cases, even a family bank. Annual meetings are held to review the current year’s activities and discuss what has been accomplished and whether goals have been met. It is also a time to set goals and objectives for the next year. Examples of topics that might be discussed include:

  • The status of existing or prospective loans made to family members for such things as starting businesses or buying homes
  • Updates on grants made by the family foundation to non-profits and status reports from grantee organizations
  • Issues related to family owned vacation properties, including ownership transfer to next generation, maintenance, renovations, etc.
  • Policies around in-laws, inheritance issues, prenuptial agreements (this is often a challenging topic and is best addressed before situations arise)
  • Introduction of younger family members as meeting participants

While annual meetings are a time to come together for financial-related discussions, they can also be combined with holiday gatherings or family adventures, whether it’s outdoor experiences or exotic travel. This serves to ensure a more holistic experience, rather than focusing exclusively on financial issues. 


Soltis Investment Advisors’ Service Project

December 4, 2015

On December 4, 2015, the entire Soltis team volunteered with Welfare Square to help the organization sort clothing donations, which are distributed as part of their extensive assistance program for needy individuals. Welfare Square was founded by the LDS Church in 1938 and has been helping people for more than 75 years. Soltis Investment Advisors salutes their work and the enormous contribution they make to the community.

Kim Anderson - Welfare Square Welfare Square


Soltis Investment Advisors Opens Salt Lake City Office

October 8, 2015 

Soltis Investment Advisors celebrated the establishment of their Salt Lake City office on Thursday, Oct. 8, 2015 with an open house and ribbon-cutting ceremony. The St. George-based firm, which has experienced rapid growth since its inception in 1993 and now manages or advises on more than $1.5 billion in client assets, serves clients in Utah, along the Wasatch Front and across the country. With the addition of advisors and increase in clients in the Salt Lake City area, the firm decided that the time was right for a local presence.

BYU Basketball Coach Dave Rose and Fidelity’s Chief Fraud Prevention Executive to Speak at Annual Wealth Management Conference

September 22, 2015

Soltis Investment Advisors is gathering high­-profile clients and industry leaders around the country to Sun River Resort at their 9th Annual Wealth Management Conference September 24­25, 2015. Several nationally sought­after speakers will deliver messages surrounding the conference theme “Teamwork: Working in Unison,” as well as industry experts speaking on keys of various aspects of personal/family financial management.

Featuring keynote speaker, Dave Rose to speak on this years’ conference theme “Working in Unison as a team.” Coach Rose is the accomplished head basketball coach at BYU and is currently the school’s all­-time leader in winning percentage. He will share experiences and insight into how to work cohesively as a team. Continue Reading →

Independently Certified

Soltis Investment Advisors

Soltis Advisors is proud to be among the first investment advisors globally to successfully complete the independent certification process of CEFEX, Centre for Fiduciary Excellence. CEFEX certification independently analyzes the trustworthiness and best practice processes of investment fiduciaries.

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