Discover why the Better Way is only the way to manage the 401(k) prudently.
I) Unbiased Advice
In order to arrive at our planned futures, we must first comprehend the plan we hope will someday lead us there. Thus the Better Way is the path of objectivity and transparency. It is a roadmap built by accurate, expert advice centered on your unique needs and best interests. It is a retirement plan you can understand, leading the way to the future you envision.
At Cypress Asset Management, Inc. /401(k) Platform/The BAM Alliances™, we call this approach to 401(k) management the Better Way, but one might argue that it is also the only way to successfully serve clients in a diligent, prudent, and earnest manner. As an independent, fee-only firm specializing in retirement plan analysis and oversight, we neither accept nor pay commissions and finder's fees. We do not sell proprietary insurance plans or other investment products, nor are we affiliated with anyone who does.
In short, we only succeed when you do. This concise business model means that our judgement is unclouded, our analyses are unbiased. Traditional, product-centric methods of the past left clients by the wayside as they speedily paved the way toward their own wealth and self-serving agendas. This was, and is, unacceptable. When futures and dreams are at stake, only the soundest advice will do. This the promise we make to all of our clients: to always advice with their goals, livelihoods, and concerns at the forefront of the decision-making process.
II) Value Evidence Over Emotion
For decades, Wall Street has profited on the idea that stock picking and finding the ‘next best thing’ can make investors rich. An entire industry of financial media has grown up around the same notion. But picking a winner by timing the market is virtually impossible, and managers who try to succeed by doing it largely fail.
In fact, research shows just 19 percent of funds beat their benchmarks over a 10-year period.* There are more than 7,000 mutual funds in America. The odds that an advisor or plan sponsor can pick a menu of 10 to 20 funds that will outperform in one year – let alone 10, 15 or 20 years – are abysmal.
We think investors deserve a better shot at success. Instead of focusing on what happened last year or even over the past few years, our approach is based on 60 years of academic research on how capital markets work – research that’s motivated by objectivity and held to the stringent standards required for peer review and publication.
Put another way, we’ve found there are far better ways to enhance your returns than searching for a needle in the haystack. We call it owning the haystack.
Our evidence-based approach (the same evidence, by the way, that earned researchers the Nobel Prize in Economics in 2013) has proven that a globally diverse, low-cost mix of investments in a portfolio chosen based on an investor’s unique risk tolerance and rebalanced regularly to hedge against the hazards of emotional investing is the best way for your employees to achieve their long-term retirement goals. As your fiduciary partner, we’ll use the science of investing to build your plan based on this evidence, and help your employees choose the investments that are right for them.
III) Access to Exclusive Investments
The majority of the funds we use in the Cypress Asset Management, Inc. / 401(k) Platform/The BAM Alliance program come from Dimensional Fund Advisors (DFA).
It is important for you to know that none of the service providers in the 401(k) Platform/The BAM Alliance program 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 largest mutual fund companies in the United States, managing more than $400 billion for individual and institutional investors.
So why isn’t DFA a household name?
Unlike nearly all other fund companies, DFA doesn’t take all-comers to its funds. General, DFA funds are available only through large institutional investors and independent advisors vetted and approved by DFA.
DFA’s client list reads like a Who’s-Who of this country’s premier corporations, public retirement plans and non-profit institutions.
Compare the advantages of the Cypress Asset Management, Inc. / 401(k) Platform/The BAM Alliance program to those sold by brokers or offered direct by large fund companies and insurance companies:
IV) Fiduciary Liability Protection
In today’s litigious society, plan sponsors are rightfully concerned about the liability inherent in offering a 401(k) plan. And the individuals responsible for those plans are increasingly aware of their own personal liability.
With the 401(k) Platform/The BAM Alliance 401(k), both BAM Advisor Services serves as the 3(38) ERISA investment advisor for the plan sponsors and the individuals responsible for the plan (committee members, trustees, etc.) receive the highest level of fiduciary liability protection available.
As an independent, fee-only advisor, Cypress Asset Management receives no compensation from the investments we select for your plan. This objectivity allows us to serve as a fiduciary to your plan. While this does not absolve a plan sponsor of all responsibility, it does shift the burden of investment selection and monitoring to Cypress Asset Management.
We have also developed a Prudent Fiduciary Process based on global fiduciary standards of excellence that guides each step in the oversight of your plan, further broadening the fiduciary protections provided by the 401(k) Platform/The BAM Alliance 401(k).
V) Fee Transparency
Are you confident you know all of the expenses of your current 401(k) plan?
The recent flurry of lawsuits alleging breaches of fiduciary duty have centered on the answer to that question. Unfortunately, due to the pervasive practices (revenue-sharing, 12(b)1 fees, sub-transfer agency fees, etc.) of the retirement plan industry, many plan sponsors are not confident in their knowledge of the total expenses of their plans. Yet ERISA clearly states that plan sponsors have a duty to understand fees and expenses and to ensure that those are reasonable.
With the 401(k) Platform/The BAM Alliance 401(k), you will never have a doubt about your fees and expenses. As a fee-only advisor, we do not accept revenue-sharing of any kind. We are compensated only by you as our client. Therefore, we provide a clear accounting of all fees and expenses so that you can be confident in fulfilling your responsibilities to plan participants.