Retirement Planning Services

Arkin Financial Advisors, LLC (AFA) is a Savannah based fee-only Registered Investment Advisor that provides evidenced-based, low cost retirement plan services. Our mission is to enhance the outcomes of retirement plan participants by addressing the many flaws in the retirement plan system that has been caused by the domination of the large product providers in the industry. We are raising the bar of expectations that the industry has set so low for plan sponsors and participants for too long.

The myth is by offering large numbers of funds and canned education, the plan trustees have offloaded their fiduciary responsibility. The DOL has indicated that if a participant does not possess the education and background to invest their plan assets, then the trustees may continue to be liable for bad outcomes. A better approach is offered by us through the BAM Alliance.

The key point above is service. Conventional advisors provide a platform of hundreds to thousands of funds that are likely to confuse most plan participants.

Better Approach to Reduce Trustee Fiduciary Liability

There are 2 concepts that you need to know: the difference between an ERISA §3(21) advisor and ERISA §3(38) investment manager.

Any plan sponsor that lacks the technical knowledge and experience to properly manage investments is required by ERISA to hire knowledgeable advisors. Typically, these advisors have been 3(21) fiduciaries. The 3(21) advisor serves as co-trustee with the plan fiduciaries (you) to recommend investments, monitor the investments, and provide participant education. These services are on a consultative basis and since the 3(21) advisor does not have discretion; the final responsibility rests with the plan sponsor (you). By hiring a 3(21) advisor, you have cut your risk somewhat.

The 3(38) advisor is appointed by the Plan Sponsor to manage the investment process. The 3(38) advisor becomes solely responsible for the selection, monitoring and replacement of plan investment options. The plan sponsor is then relieved of the responsibility for the 3(38)'s decisions. The 3(38) advisor does not take on the liability for poor investment decisions made by the participants, such as choosing a too aggressive allocation. The Plan Sponsor still has the residual duty to select the 3(38) advisor and to provide oversight. So, in essence the Plan Sponsor has outsourced much more of their fiduciary liability.

In this particular case, Arkin Financial Advisors, LLC serves as the 3(21) advisor and BAM Advisor Services, LLC serves as the 3(38) advisor.

Who are we?

Arkin Financial Advisors is an independent member of the Bam Alliance, and the BAM Alliance works with over 700 plan sponsors as well as more than 20,000 plan participants with over $2.2 billion in plan assets. We bring a focus on adding value through a service vs. a fee and products. Aside from being one of the largest evidence-based advisory firms working in the 401(k) space, the BAM Alliance also helps serve a collective asset base of over $24.5 billion and over 17,000 individuals, families, endowments and foundations.

As a firm, we base all of our advice to plan sponsors and participants exclusively on the vast amount of peer-reviewed academic research (that most of Wall Street has ignored for many decades) on how capital markets work, retirement/financial planning and behavioral finance. To help you understand our retirement plan advisory services at a high level, I have highlighted two of our major areas of focus; our Investment philosophy and our service model.

Investment Philosophy:

Our investment philosophy involves helping plan sponsors and participants implement the best practices that have been defined by many decades' worth of academic and practitioner research into the world's financial markets. We believe research clearly shows the surest route to strong investment performance is by focusing on broad diversification; capturing the risk premiums that markets provide; keeping investment costs low; and implementing a long-term investment plan that reflects participants' need, ability and willingness to take risk.

This contrasts the views of most "Wall Street" driven firms that most of the investing focuses should be dedicated to identifying and hiring the most talented fund managers. Once these managers have been selected they then monitor their performance, hoping it is persistent.

Since the research shows the overwhelming majority of investment managers underperform their market benchmarks even in short periods, the ones that do out-perform over short periods, tend to not repeat that performance in the future; we believe there is a more prudent way.

Our philosophical approach leads to:

  • Broad diversification across all major asset classes to ensure that participants are able to capture market premiums including the equity risk premium, size premium, value premium and term premium
  • Identifying low-cost mutual funds that provide the purest, most efficient exposure to each asset class
  • Utilizing the science of investing to constructed and manage a series of 5 different risk-based portfolios that seek the highest expected return for a given level of risk allowing participants to make a single election that best fits their ability, willingness and need to take risk
  • Removing the emotions of participants to help them remain discipline and systematically rebalance those portfolios, ensuring that they are in a cycle of buying low and selling high rather than the alternative that all too many participants and investors follow.

Service Model:

We recognize that the American education system has failed in the area of preparing our population for the many difficult choices and experiences that they must live through in order a successful retirement. We believe it's our obligation as professionals in this industry to bring a service to participants intended to increase participants' retirement readiness. As part of that service, we guide plan sponsors through a prudent fiduciary process each year to meet their obligations. In addition, we take on the fiduciary responsibility as a discretionary investment fiduciary.

After years of implementing our retirement plan service model, we as independent members of the BAM Alliance are more convinced than ever that structuring participants' decision making process for selecting their investment options is as important, if not more important than the options themselves.

We understand that you can give plan participants the best funds that have ever existed, but if they don't use them correctly and they don't have the investor behavior necessary to receive the returns that markets provide over time, then participants are not benefiting at the highest level from our fund selection process.

Bringing the right blend of live onsite presentations, one-on-one meetings, technology, printed materials, videos, webinars and email communication, provides participants with the resources and support they need to have the greatest odds of success. It is our goal, that the service we provide to plan participants gives them the sense that their employer cares as much about their success in life as they do in their careers.

In addition to our service model and how we work with participants, we as members of the BAM Alliance's believe that educating participants is an important goal.

But Let's Not Stop Here...

We also offer investment services for other plans, including Defined Contribution plans and Defined Benefit Plans. A Cash Balance Plan is a relatively new type of retirement plan that allows even small businesses to contribute up to $200,000 per participant depending on the age of the participant. We have access to retirement record keepers, third party administrators and actuaries to customize the best plan for your situation.