BenefitStreet Announces ETF 401(k) Advisor Training Program

SAN RAMON, Calif.--(BUSINESS WIRE)--BenefitStreet, Inc., a 401(k) record keeper and corporate benefits solution provider, launched a new program today designed to help advisors introduce ETFs to 401(k) plans. The advisor training program follows the recent announcement from BenefitStreet and Barclays Global Investors (BGI) of BenefitStreet’s new solution to enable widespread adoption of ETFs in 401(k) plans.

“Advisors want to help local corporate executives and high net worth individuals who often bear the fiduciary risk as trustees and board members”

In the two weeks since that announcement, BenefitStreet has received more than $150 million in ETF asset commitments from independent investment advisors.

“Since the recent launch of our ETF 401(k) platform with Barclays Global Investors, we’re seeing a surge of interest from advisors who want to introduce ETFs to their 401(k) plans, and they are asking for our help,” said Jim Drury, CEO of BenefitStreet. “Advisors understand that our solution with BGI makes ETFs cost effective and transparent in 401(k) plans for the first time.”

BenefitStreet’s platform allows participants to invest directly in ETFs, rather than through a collective trust. The direct method minimizes commission costs and provides greater transparency. ETFs in 401(k) plans can provide precise asset allocation and lower management fees than other investment alternatives in these plans. BGI’s iShares Funds will be offered exclusively as the investment choices in BenefitStreet’s ETF 401(k) platform, with other select ETFs being added over time.

The $150 million commitment demonstrates the potential growth for ETFs in the 401(k) market. Currently, 401(k) accounts hold an estimated $1 billion in ETFs.

“There is a pent-up demand among advisors to get ETFs into 401(k)s,” said John Wing, president of Quantitative Advantage, a Minnetonka, Minn., asset-management firm building portfolios using ETFs. “We’ve been managing portfolios of iShares since 2001. All along the way we’ve had advisors ask if we can do this in a 401(k) plan. This is the first time that it’s possible to get all the benefits of iShares, including the low cost, transparency, and liquidity, in a 401(k).”

The immediate market demand was one of the factors behind BenefitStreet’s creation of Advisor Connection, a training and support program aimed at providing advisors with the best information and expertise possible to help them establish ETFs as a 401(k) plan option. Since the announcement of the BenefitStreet ETF 401(k) platform, more than 100 registered investment advisors have expressed interest in the new product. Many asked for help in selling ETFs to their 401(k) customers.

“The BenefitStreet/BGI combination promises a state of the art platform with transparent costs,” said Wilford Taylor, president of AdvisorAlliance in Rogers, Ark. “By providing Advisor Connection, BenefitStreet will help bring ETFs into the portfolios of more investors.”

Advisor Connection offers a wide range of educational and support services, broken out into four levels of commitment. At the basic level, advisors have access to web-based training tools, training videos, and information that can be shared with plan sponsors. At the highest level, BenefitStreet provides a dedicated account manager who will assist advisors with plan sponsor visits and personalized service.

“Advisors want to help local corporate executives and high net worth individuals who often bear the fiduciary risk as trustees and board members,” said Mr. Drury. “They will have the full support from BenefitStreet so they can build stronger local relationships. This program allows advisors to select a level of support which is consistent with their strategic plans for serving clients in this area.”

“The regulators and the class action lawyers are dead serious about fees and fee transparency,” said Michael Case Smith, head of Zacks IFE in Chicago. “This is the product that the market has been waiting for, iShares ETFs in BenefitStreet’s proven delivery system. This is the beginning of what I believe will be a long-term shift for 401(k) assets toward low fees and transparency, with no conflicts of interest.”

ABOUT BENEFITSTREET, INC.

BenefitStreet, Inc. serves over 7,100 corporate clients, was founded in 1993 with headquarters in San Ramon, Calif. and has 12 locations throughout the United States. BenefitStreet, Inc. delivers unprecedented functionality in on-demand solutions for comprehensive financial services and group benefits management and administration. BenefitStreet creates significant value for companies who want to streamline benefits management and administration, manage efficiently and deliver the most responsive and effective solutions to their clients and employees. For more information, please visit www.benefitstreet.com