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Wednesday, November 28, 2007|
XShares Lands 401k Distribution for its ETFs
XShares Advisors has sealed a distribution deal with retirement plan provider RPG Consultants. RPG, which, like XShares is based in New York, will include XShares' TDAX family of target-date ETFs in its platform.
NEW YORK, Nov. 28 /PRNewswire/ -- New York-based XShares Advisors LLC, sponsor of the TDAX, Adelante and HealthShares families of exchange-traded funds (ETFs), today announced that it has entered into a strategic partnership with New York-based RPG Consultants, a retirement plan provider of record keeping, administration and consulting services, to provide plan sponsors, advisors, brokers and third-party administers (TPAs) the ability to add lower- cost ETFs to their retirement plan portfolios. Ordinary brokerage commissions apply. The RPG open architecture platform facilitates the use of actively and passively managed mutual funds as well as any of the approximately 550 ETFs currently trading in the U.S.
In addition, RPG Consultants will be providing the platform to allow advisors to offer the XShares Advisors' TDAX family of target-date ETFs, the first lifecycle ETFs to be introduced to the market as the default option in their 401(k) offerings to comply with recently enacted legislation.
"Our TDAX family of five lifecycle ETFs provides investors with fully diversified retirement strategies bundled in a single ETF that automatically rebalances its constituents as it approaches its specific target retirement date," said XShares Group CEO, Bill Henson. "It's a lower-cost, one-step solution to retirement planning."
"We believe employees who are in 401(k) plans should also be given cost effective and easily understood investments from the widest range of choices that their financial advisors can provide AND that Employers have the same cost effectiveness in a seamless operational and administrative platform," said Alvin H. Rapp, RPG Consultants founding partner. "We encourage advisors to take advantage of the features that our platform provides, including offering asset allocations models using inexpensive ETFs."
RPG supports 401(k) plan providers to incorporate lower-cost, transparent, and highly liquid ETFs in retirement plans-something that until recently has been extremely difficult to accomplish. In the past, if a 401(k) plan wanted to use ETFs in its portfolios, each individual plan participant would have had to open a brokerage account and pay the requisite brokerage fees.
Not surprisingly, brokerage fees, paper work and the man hours necessary to process both were prohibitive. By working with many financial institutions to date in eliminating the trading fees and commissions typically associated with retail ETF purchases, RPG devised a fully-automated daily valuation internet-driven administrative and recordkeeping program that results in lower overall plan fees. For example, an all inclusive 401(k) ETF program using an all ETF portfolio could cost as low as 1.00% to 1.75%.
Additionally, RPG offers full-service retirement planning, covering a wide range of plans, such as defined benefit, defined contribution and 401(k) programs, complex pension strategies and non-qualified deferred compensation programs. It has relationships with SmithBarney, UBS, Merrill Lynch, Morgan Stanley, Charles Schwab, FiServ, and others.
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