EMPLOYEE QUESTIONS & ANSWERS
Q: Who is StraightLine?
A: StraightLine, a Michigan company, was created in 2001 for the sole purpose of advising and managing employee's portfolios while they are enrolled in their plan. The founders who developed StraightLine came from different Wall Street firms with substantial experience in portfolio management to offer completely unbiased institutional research to the participants.
Q: What is personal 401(k) management
(managed accounts)?
A: StraightLine provides 401(k), 403(b) and 457 investment management
for participants who prefer having an absolutely independent third-party
research team manage their account investments within their existing
employer-sponsored retirement plan. Keep in mind, we don't just give
advice—we actually
manage the account—making changes to investments as needed throughout
the year.
Q: Why would I want anyone to manage my account?
A: Statistically, employees who manage accounts on their own dramatically under perform the S&P Index. For the last 20 years the average mutual fund equity investor garnered a full 7% less per year than the S&P Index¹. There are many reasons but the most predominant are: lack of time, lack of experience, emotional decision making, and apathy.
The institutional research tools that we employ not only allow us to choose the most appropriate manager in any sector for portfolio construction, they also give us the ability to constantly monitor the managers to ensure that any adjustments necessary are done as quickly as possible.
Q: How are you different from other Financial
Advisors?
A: Many financial advisors certainly offer valuable advice, but most
rarely have the time or institutional research tools required to expertly
and actively manage your 401(k), 403(b) or 457 retirement account.
StraightLine utilizes state-of-the-art institutional research tools to
constantly monitor
the investment choices in your plan—allowing us to make changes as
needed.
Q: Do I have to move my money from my existing
retirement account?
A: No. We actively manage your investments within your existing 401(k),
403(b) or 457 plan.
Q: How do you make changes to my portfolio?
A: By electing to use our Pro(k) service, you agree to share with us
your current user name and password for the limited and secure purpose
of repositioning the investments in your retirement account.
Q: Is it safe to share my password with StraightLine?
A: Yes. There is no way for us to remove funds from your account because
we are not the account owners. StraightLine takes every precaution to
ensure the security and confidentiality of your accounts.
Q: Can I continue to view my portfolio online
since StraightLine is making the changes now?
A: Yes. You retain the same access to your account you would normally
- your account remains exactly the same, it is just expertly managed by
our team of investment professionals.
Q: How often do you make changes to my portfolio?
A: Our research team continually reviews market conditions, world events,
and other factors that affect the value of your retirement account. Based
on that information, we typically make one to three proactive changes
to each portfolio per year.
Q: I do pretty well on my own even though statistics show the average person does not. Is there any reason I should consider StraightLine?
A: We wholeheartedly support the efforts of the investing public to take greater control of their retirement assets. The “Advice Only” product was created for two reasons: one, to give the participants a window into how a professional manager would be managing the accounts and two, to allow the participant to run retirement “what if” scenarios that permit the employee to theoretically adjust certain variables like savings rate, return percentages, and retirement dates.
But the truth is unless you have the time and research available it just makes sense to let a research team that acts solely on your behalf handle the responsibility. Over time the prudent and diligent practices we employ will make a big difference.
Q: How's your performance?
A: That's the number one question we get asked and the one thing you should remember is that investing is about prudent practices consistently applied. What that means is that if our research is good – which it is, our timeliness and effectiveness are good – which they are, and our constant monitoring is good, performance has and will follow. Our goal is to beat the correlative benchmarks and we have done very well in that regard across all platforms.
Q: By signing up for your service does that mean I can expect home run returns?
A: I can say this about expectations. We are a research firm and not a sales firm, and as such, we construct and monitor portfolios to allow you to have a well diversified portfolio made up of the most appropriate managers in each sector.
Performance is a direct result of this effort but as is human nature, we get calls from people suggesting that if we would have been smarter we would have put all our eggs in the small cap sector for example. We are not that firm – and truthfully there is no such firm. Your retirement account is extremely important to you and it is vital to us. Therefore we will be tremendous stewards of your trust.
Q: What is your annual fee?
A: The annual fee for Pro(k) ranges up to $500 per year depending
on the value of your account. The annual fee is typically paid by the
employee (often directly from their plan account), although some employers
have chosen to pay the fee as part of the compensation package for all
or a select group of employees. There are no other fees or commissions
paid to StraightLine by anyone in connection with this service.
Q: Can I call the research department just to talk?
A. You bet. It is equally important for our research staff to answer as many questions as we can. We continually strive to be the best financial service firm possible and those communications are vital to us.
Q: How do I sign up?
A: There are three ways you can sign up – in person, have the papers sent to you and we'll follow up with a call, or on the web. Click here to signup via the web.
Q: Is there a penalty to discontinue the Pro(k)
service?
A: No. While we anticipate that you will be very pleased with our Pro(k)
service, we realize the need to address this issue for your peace of
mind. Our
clients only pay for the quarters in which they use the service. There
is no penalty or surrender charge to discontinue. If you do cancel
the service, you'll be issued a prorated refund.
Q: Can retirees enrolled in the plan use the Pro(k)
service as well?
A: Yes. The fee structure and approach is exactly the same for retirees
and current employees.
Q: How do you communicate with me?
A: We use a combination of e-mail, phone calls, and postal mail to
update employees on changes to their portfolios. Every time a change
is made to their account allocations we will notify the employee.
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