Press Release
Barclays Forms Relationship with Internet Investment Education LLC
SAN FRANCISCO, CA, August 21, 2002 - Barclays Global Investors (BGI), one of the world’s largest asset management firms, announced today its relationship as a primary investment service provider for The 401k Solution™, which offers Third-Party Administrators and Registered Investment Advisors serving the small to mid-size 401k market a highly effective blend of plan administration technology, a flexible operating platform, high level of cost disclosure, and institutional pricing of investment products. Created by Internet Investment Education LLC (IIE) of Portland, Oregon, – the unique platform stands apart from other bundled solutions offered by higher-cost providers serving the small to midsize plan market.
"Smaller defined contribution plans and their employee participants have not had the benefit of low expenses, particularly related to investment management fees, as typically experienced by the largest plan sponsors," said Michael Fisher, Managing Director of Barclays Global Investors. "We recognize that The 401k Solution brings a new standard of efficiency to smaller and mid-sized plans, with greater disclosure and understanding of actual plan components, and an institutional investment approach based on a rational asset allocation strategy versus fund selection based on brand names."
"I developed The 401k Solution in direct response to problems which confront participant-directed 401k plans - high fees and expenses, poor participation levels, low contribution rates, and poor investment returns," said Darwin Abrahamson, CEO of Internet Investment Education LLC. "I quickly realized that technology could deliver the tools and services 401k plans need to solve these problems."
IIE’s research demonstrated that mutual funds relied upon by most small and mid-size plans result in the investment component averaging between 70-90% of total plan costs. By including Barclays Global Investors’ institutional investment strategies in The 401k Solution, plan sponsors now have the potential to lower their investment fees between 54-88%, depending upon the investment strategy selected.
"Given consensus expectations for a lower equity risk premium (expected annual return of the S & P 500 versus US Treasury Bonds) over the next decade, and greater scrutiny of what 401k plans actually pay for various plan components, substantially reducing investment fees becomes an even greater consideration for plan sponsors and their employee participants," said Mr. Fisher.
The 401k Solution offers Financial Advisors, Third-Party Administrators and Plan Sponsors a complete solution for administering and servicing 401k plans; including, third party administration, daily valuation, online enrollment and investment selection, investment education, automatic portfolio rebalancing, custody services, and a wide range of investment choices which includes institutional investment options. The 401k Solution can be found at www.investnretire.com.
Barclays Global Investors is one of the world’s largest asset managers1 and the world’s largest provider of structured investment strategies; such as indexing, tactical asset allocation, and quantitative active strategies.2 BGI managed more than $760 billion in assets as of 6/30/02, and over 2,000 funds, for nearly 2,000 clients in 41 countries around the world. As the creator of the first index strategy 30 years ago, BGI is an innovator in investment management, applying science and technology to the investment process.
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