A Better Way to do the 401(k)

Remember when 401(k) plans

a benefit?were supposed to be…

The Advisors AccessThe Advisors Access™ program has attracted more than $200 million in 401(k) program has attracted more than $200 million in 401(k) plan assets since the beginning of 2008 and has gained the endorsement of plan assets since the beginning of 2008 and has gained the endorsement of some of this country’s most prominent independent fi duciaries.some of this country’s most prominent independent fi duciaries.

Advisors Access™. A Better Way to Do the 401(k)

Fee-only Registered Investment Advisor

Advisor assumes fi duciary liability for fund selection and

performance monitoring

Access to DFA funds

Advisor-Managed Portfolios

Expert team comprised of independent service

providers

Access to thousands of mutual funds

Full fee transparency

Direct advice to participants

YES

Advisors Access

NO

Broker-Sold Plan

NO

Direct-to-Provider Plan

YES NO NO

YES NO NO

YES NO NO

YES NO NO

YES SOME SOME

YES NO NO

YES SOME SOME

Compare the advantages of the Advisors Access™ 401(k) program to those sold by brokers or offered direct by large fund companies and insurance companies:

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A benefi t for employees, providing them with an outstanding opportunity to grow their retirement assets, tax-deferred, through their employer?

And a benefi t for the companies who offered those 401(k) plans, helping to distinguish them from other, less-generous companies in the market and keeping their employees happy and productive?

Somewhere, somehow, the 401(k) plan lost its way. The market became dominated by huge fi nancial services companies that only wanted to cram as many of their high-fee, proprietary funds in the fund lineups as possible. Those exorbitant fund fees were used to hide everything from recordkeeping expenses to broker compensation, making it impossible for plan sponsors and plan participants to truly understand plan costs.

Those same providers refused to take on the liability of fund selection and performance monitoring, instead forcing the executives of the companies who operated the plan to shoulder that liability.

Meanwhile, participants were left to fend for themselves, forced to choose from a baffl ing menu of investment options to cobble together an investment portfolio that they alone were responsible for managing and maintaining.

It doesn’t have to be this way.

The 401(k) plan can work. It can meet the needs of plan sponsor and plan participant alike, and do so in a cost-effective, client-focused manner.

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Welcome to Advisors Access™: A better way to do the 401(k)

The majority of the funds we use in the Advisors Access program come from Dimensional Fund Advi-sors (DFA). It is important for you to know that none of the service providers in the Advisors Access pro-gram receive any compensation from DFA for using their funds.

We simply think DFA funds are among the best in the industry.

DFA is one of the 15 largest mutual fund companies in the United States, managing more than $165 billion for individual and institutional investors.

So why isn’t DFA a household name?

The simple answer is that DFA doesn’t want to be a household name. DFA doesn’t advertise and doesn’t offer its funds through retail distribution channels. Unlike nearly all other fund companies, DFA doesn’t take all-comers to its funds. In fact, the only entities in the country that have access to DFA funds are large institutional investors and independent advisors that DFA has personally vetted and approved.

The reason for all this exclusivity is that DFA believes there is a right way to invest – and a wrong way – and the fi rm only wants to attract assets that are com-mitted to its disciplined investment philosophy. That philosophy includes a belief in minimizing fees and trading, diversifi cation, effi cient markets and long-term investing. DFA adamantly avoids the kind of “hot” money from retail investors that fl ows in and out based on short-term market conditions and drives up expenses in the process.

DFA’s client list reads like a Who’s-Who of this coun-try’s premier corporations, public retirement plans and non-profi t institutions, including:

AT&T Inc.Boeing CorporationCalifornia Public Employees’ Retirement SystemCarnegie Mellon UniversityIllinois Municipal Retirement FundJ. Paul Getty TrustKellogg CompanyMerckPepsiCo, Inc.Packard FoundationPfi zer Inc.Sara Lee CorporationSt. John’s Hospital

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Institutional funds from firms like Dimensional Fund Advisors are used extensively in the Advisors Access 401(k) portfolio strategies.

About DFA: The Best Big Fund Company You’ve Never Heard of…

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Advisors Access™ is the way the 401(k) should be – a program that provides expert, confl ict-free advice to plan sponsors and their participants, access to some of the most sought-after investment vehicles in the world, and total plan costs that are much lower than many of the programs offered by the large fi nancial services providers.

The Advisors Access™ program highlights include...

• Fee-only, independent Registered Investment Advisors who serve as both ERISA 3(21) and 3(38) advisors, taking the liability for investment selection and performance monitoring off of the plan sponsor.

• Expert, one-on-one advice to plan participants.

• Access to institutional investment vehicles that are not available on retail 401(k) platforms and normally require a minimum investment of $2 million per fund.

• Advisor Managed Portfolios that give participants the ability to turn the management of their 401(k) assets over to expert advisors.

• A comprehensive fund menu that is created by independent advisors using our Proprietary Fund Screening Process.

• The fl exibility for participants who desire to manage their own portfolio to open a self-directed brokerage account and select from among thousands of mutual funds, stocks and bonds.

• Independent providers who are free from the confl icts of interest that plague traditional 401(k) plans.

• No hidden fees or fee-sharing arrangements between providers, giving you full transparency for all plan costs.

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INVESTMENT ADVISORS

The Advisors Access™ Expert Team

One of the main benefi ts of the Advisors Access 401(k) program is that we have assembled a team of expert service providers in every area. Unlike bundled programs in which one provider dabbles in a little of everything, the Advisors Access program brings an Expert Team concept to the management of your 401(k) plan.

The Advisors Access™ Expert Team Members include:

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STEP 1: Analyze Fund StructureWe use only open-end mutual funds in the Advisors Ac-cess program. We exclude all collective trusts, annuities, closed-end mutual funds and private money managers from consideration. While such investment vehicles may sometimes have merit for individual investors, it is often diffi cult, if not impossible, to obtain reliable third-party information on which securities those types of investment vehicles hold, what their fees and expenses are, and what their performance has been. This lack of verifi able information makes such investment vehicles unsuitable for consideration in a 401(k) plan.

STEP 2: Sort Active from Passive FundsStudies show that more than 80% of actively managed funds fail to beat their market benchmark over fi ve-year time periods. In contrast, passively managed funds seek to track a market benchmark or asset class at low cost and with great effi ciency. In the Advisors Access program, we screen out high-fee, poor performing actively managed funds and focus our search process on passively man-aged funds.

This isn’t just our opinion; according to The Third Restate-ment of the Trusts, “Current assessments of the degree of effi ciency (of the capital markets) support the adoption of various forms of passive strategies by trustees … the greater the trustees’ departure from one of the passive strategies, the greater is likely to be the burden of justifi -cation and also of continuous monitoring.”

STEP 3: Identify Available Asset ClassesOne of our main goals when selecting funds for the Advisors Access program is to be sure our investment vehicles cover the full spectrum of asset classes and investment styles – stocks and bonds, foreign and domes-tic, large and small, growth and value, etc. We seek out fund companies that provide very precise exposure to our targeted asset classes, and do so with the least amount of tracking error and with very low fees. This helps us ensure that participants using our funds and portfolios get the asset-class exposure they are expecting.

STEP 4: Research Fees, Sales Charges and Trading CostsWhen it comes to fund fees and expenses, the less you pay, the more you keep. That may seem like common sense, but it escapes the vast majority of the fund indus-try, where total funds costs often run between 2% and 3% annually. In the Advisors Access program, we place a pre-mium on funds that keep fees well below industry average. In fact, many of the funds in our program cost fi ve times less than the average retail actively managed stock fund!

STEP 5: Secure Access To Institutional FundsRetail funds attract assets from small investors, who tend to trade frequently and drive up fund operating costs. In Advisors Access, we use predominantly institutional mutual funds, which are used by some of this country’s largest retirement plans, foundations, endowments and not-for-profi t groups. These funds incur much lower expenses and therefore often generate a higher net return than comparable retail funds that trade more often.

From this rigorous screening process emerges some of the most effective, lowest cost investments available in the 401(k) marketplace, the majority of which come from Dimensional Fund Advisors (DFA) and Vanguard – two of the most highly regarded fund companies in the world.

In the Advisors Access program, we use these funds to craft a comprehensive fund lineup that participants can use to create their own portfolios, and we also use those same funds to construct the Advisor Managed Portfolios so popular with participants.

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The Advisors Access™ Proprietary Fund Screening Process

In Advisors Access, we aren’t limited to just a few fund families. As independent RIAs, we are free to choose from over 10,000 mutual funds when we create our fund lineup and construct our Advisor Managed Portfolios. So how do we sort through thousands of investment vehicles to fi nd the best funds for our clients?

The answer lies in the Advisors Access Proprietary Fund Screening Process, a 5-step methodology we developed to sort the good from the bad and fi nd the investment vehicles we believe to be best-in-class.

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Sort

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Iden

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Avai

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ALL FUNDS

STEP 1 STEP 2 STEP 3 STEP 4 STEP 5 Advisors Access Funds

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RECORDKEEPER ALLIANCEOne of the main advantages of the Advisors Access pro-gram is our nationwide network of independent record-keeping fi rms. These experts in benefi ts consulting and administration are completely independent of any fund company, brokerage fi rm or insurance company; as such, their incentive to provide top-notch client service and professional counsel is paramount.

Recordkeepers participating in the Advisors Access Recordkeeper Alliance include:

• Schwab Retirement Plan Services, Inc., one of the largest and most respected recordkeeping fi rms in the United States. Schwab is one of the only large providers in the industry that does not require plan sponsors to use proprietary, high-fee funds in their investment menu.

• McCready & Keene, one of the nation’s largest independent third party administration, recordkeeping and actuarial fi rms, dually headquartered in Virginia and Indiana.

• Administrative Services, LLC, one of the Southeast’s premier benefi ts consulting fi rms and a subsidiary of the highly regarded accounting fi rm Kassouf & Co. in Birmingham, Ala.

CUSTODIANPlan assets in the Advisors Access program are held in trust accounts at TD Ameritrade, Wilmington Trust, or Charles Schwab & Co., three of the largest and most respected custodians in the business. While the advisors to your plan are authorized to manage the plan’s assets, the assets are always held in plan name at the custodian. That custodian works for you, not your advisor, providing you important peace-of-mind about the safety and security of your plan’s assets.

Our pledge of independence and objectivity:

Neither the investment advisors nor the plan

recordkeepers in the Advisors Access program

receive any compensation from the investments

offered through the plan.

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The Advisors Access™ Investment ModulesNot Just Choices… SOLUTIONS.

In the Advisors Access program, we don’t just give you options – we give you answers. We offer three distinctly different investment modules to your participants, ranging from a complete “do-it-for-me” solution to a self-directed brokerage window that lets a participant choose just about any investment they desire.

Here is a look at the three different investment modules available in the Advisors Access™ program:

Participants can build and manage their own portfolio through a self-directed brokerage window offered by the custodians in the Advisors Access program. With this option, participants can choose from literally thousands of mutual funds and individual securities, or retain the services of an independent investment advisor to man-age their portfolio for them.

NOTE: Plan sponsors can choose to offer all three modules, or can simplify the investment line-up by offering only Module A, or a combination of Module A and Module B.

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Participants can choose from one of the fi ve Advisor Managed Portfolios constructed by the Advisors Access investment team. These all-or-nothing investment options span the risk spectrum from aggressive to conserva-tive and are designed to give participants a single-choice investment option that frees them from the burden of managing their own portfolio.

Participants can choose from a menu of twelve mutual funds selected by the Advisors Access investment team. These funds were screened from the thousands available on the recordkeepers’ platforms to provide participants with a select group of funds that are low in cost and provide outstanding asset-class represen-tation. For participants who wish to construct their own portfolios but want an objective advisor to do the research for them, these funds are excellent options.

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Most 401(k) providers tout all of the investment options available on their platform. But the reality is that participants are often overwhelmed by too much choice. Faced with mountains of data about dozens or even hundreds of funds, participants often develop “analysis paralysis” and end up making hasty, impulsive decisions about one of the most important things in their lives – their retirement assets.

We developed the Advisors Access investment lineup to overcome this problem. While the Advisors Access platform offers participants plenty of options, it also offers them something in short supply in the 401(k) market:

HELP.

Our Advisor Managed Portfolios give participants the abil-ity to make a single choice about the investment of their 401(k) assets and still have the peace of mind that they are being invested in a well-diversifi ed, expertly managed portfolio.

Unlike lifestyle and target-date funds, these portfolios are managed at the participant level by professional investment managers. Rebalancing and, if necessary, fund replacement are handled automatically for all participants. The partici-pant’s only responsibility is to select the portfolio that best suits his or her long-term risk and return needs.

Statistics show that when participants are offered the option to select an advisor-managed portfolio or construct their own portfolio, more than 80% of participants opt for the advisor-managed portfolio.

Clearly, when given the option to have an expert advisor manage their portfolio for them, the vast majority of partici-pants jump at the chance.

In the Advisors Access program, they have that chance.

The Solution to “Analysis Paralysis”: Advisor-Managed Portfolios

DEFENSIVE PORTFOLIO

CONSERVATIVE PORTFOLIO

MODERATE GROWTH PORTFOLIO

GROWTH PORTFOLIO

ALL EQUITY PORTFOLIO

The Advisors Access™ Advisor Managed Portfolios give your participants the ability to turn the management of their 401(k) assets over to professional advisors.

Risk/Return Chart

US Large Growth Stock 20%

US Large Value Stock 20%

US Small Growth Stock 7%

US Mid Growth Stock 7%

US Mid/Small Value Stock 16%

International Large Stock 14%

Domestic Real Estate 5%

International Real Estate 5%

International Small Stock 6%

Intermediate Term Bond 0%Inflation Linked Bond 0%Short Term Bond 0%

HIGH LOW

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