To offer this new platform, WisdomTree Investments in April created a new subsidiary, WisdomTree Retirement Services Inc., which is led by Director Al Shemtob (See Wisdom Tree Forms 401(k) ETF Unit ).
At a press briefing, CEO Jonathan Steinberg commented “With emphasis being placed on fees and transparency, we believe the timing is perfect.” Further, he said that WisdomTree is ideally suited for retirement plans because one of the hallmarks of the company’s fundamentally weighted ETF strategies is the focus on capital preservation and reduced volatility.
The platform will allow access to index-based investing and WisdomTree’s fundamental ETFs as the heart of the investment strategy, with the option to include mutual funds for additional diversification, the company said. The 401(k) platform also eliminates the trading fees and commissions typically associated with retail ETF purchases, Steinberg said.
The open architecture platform also features third-party Employee Retirement Income Security Act (ERISA) fiduciary and investment advisory services and is designed to be used by plan sponsors, advisers, and third-party administrators (TPAs). The all-inclusive 401(k) ETF program can be accessed for as low as 70 basis points, Shemtob said, at the press briefing.
WisdomTree offers two plan options:
- The “Model Plan” is a wrap-fee ETF 401(k) turnkey solution that offers six professionally built ETF portfolios attuned to investors’ risk tolerance or target-retirement date. The models feature 11 ETFs from WisdomTree as well as two Vanguard ETFs and two Barclays iShares. Additionally, advisers can supplement the ETF models with a menu of no-load, non-12b-1 mutual funds.
- The “Custom Plan” features all of the investment options available in the Model Plan and allows advisers who can assume more fiduciary responsibility for their clients to create customized portfolios.
CLS Investment Firm LLC (CLS) will offer the asset allocation services for the platform, Professional Capital Service (PCS) will handle participant recordkeeping, and ICTC (Ameritrade) will perform the custody and trading services.
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