From the February 2008 issue of Research Magazine • Subscribe!

February 1, 2008

XShares and RPG Target 401(k) Plans

XShares Advisors, sponsors of the TDAX, Adelante and HealthShares ETF families, has entered into a strategic partnership with retirement plan services vendor RPG Consultants in order to provide plan sponsors, advisors, brokers and third-party administrators 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 U.S. ETFs currently trading.

In addition, RPG Consultants will provide the platform to advisors who want 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," explains Bill Henson, XShares Group CEO.

"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," adds Alvin H. Rapp, RPG Consultants founding partner. "We encourage advisors to take advantage of the features that our platform provides, including offering asset allocation models using inexpensive ETFs."

RPG helps 401(k) plan providers 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, paperwork and the man-hours necessary to process both were prohibitive. By working with many financial institutions to reduce the trading fees and commissions typically associated with retail ETF purchases, RPG has come up with a fully automated administrative and record-keeping 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 little as 1.00 percent to 1.75 percent. Additionally, RPG offers full-service retirement planning covering a wide range of plans, complex pension strategies and non-qualified deferred compensation programs. It has relationships with Smith Barney, UBS, Merrill Lynch, Morgan Stanley, Charles Schwab, FiServ and others.

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Ron DeLegge is the San Diego-based editor of www.etfguide.com.

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