Case Study: Law Firm

Managing fee compression and reducing fiduciary liability

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The Challenge

This law firm worked with a bundled recordkeeper where the plan expenses were increasing each year. So, the investment committee wanted to compress the expenses for the plan participants and the firm.

The trustees were also looking to formalize the committee processes and lower their personal fiduciary liability.

The Solution

Recommended new providers

combining a national recordkeeper with a local third party administrator to initially save the firm $20,000 in plan administrative expenses.

Enhanced Investment lineup

to lower the investment expenses for participants. Plus, created a plan expense account where revenue collected in the plan could be used to pay for advisory and administrator plan expenses.

Repositioned self-directed brokerage accounts

to strategically improve key stakeholder usage while lowering plan investment expenses and eliminating the need for new accounts. Saved the firm $20,000 in plan expenses. Stonebridge Financial Group and Wells Fargo Advisors became a 3(21) co-fiduciary for the plan investments.

Created an investment policy statement

along with quarterly monitoring reports. And, along with Wells Fargo Advisors became a 3(21) co-fiduciary for the plan’s investments.

Minimized fiduciary liability

for plan trustees by implementing processes along with plan benchmarking every three years.

Met with plan participants

to help them feel comfortable during the plan transition and improving diversification of their accounts.

CLIENT PROFILE:

INDUSTRY TYPE: Professional Law Firm

GEOGRAPHY: Harrisburg

NUMBER OF EMPLOYEES: 50

PLAN TYPE:  401(k) Profit Sharing Plan

Saved the firm $20,000 in plan expenses.

“Our Investment Committee is in a better fiduciary position after engaging Stonebridge Financial Group.”

Results

  • Lowered plan expenses by $20,000.
  • The Investment Committee reduced their fiduciary liability through documented processes.
  • Added an experienced investment advisor and institution as a 3(21) co-fiduciary to the plan.
  • Formalized the brokerage account plan feature to minimize investment risk exposure.

Participants received individual help to better prepare for retirement along with action plans, including:

  • Increasing deferral contributions
  • Diversifying Investments
  • Paying down high interest debt and college debt
  • Understanding Social Security & Medicare options
  • Household budgeting best practices
  • Education planning for children

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