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Portfolio > ETFs

Folio(k) Retirement Platform Includes ETFs

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Folio Institutional, a division of online brokerage FOLIOfn Investments Inc., is furthering its foothold in the retirement planning space with the recent launch of Folio(k)–a 401(k) platform using target-date folios of exchange-traded funds (ETFs).

Folio Institutional, based in McLean, Virginia, has teamed up with Alliance Benefit Group Carolinas, a retirement plan recordkeeping and administration firm, to launch the Web-based Folio(k) platform. Participant enrollment, statements, investment requests, and employer reports are all delivered via the Internet.

Folio(k) is a turnkey 401(k) solution–including custody, trading, recordkeeping, and administration–and is available to advisors for a fee of 95 basis points.

“The retirement services space generally has been one of the fastest growing areas of our business,” says Greg Vigrass, president and CEO of Folio Institutional. “We’ve seen huge growth in advisors taking a fresh look at the [ETF] space, [and an] increase in the use of ETFs as the investment vehicle of choice, whether as an individual selection or building blocks of portfolios that advisors are using.”

Alan Smith, VP of retirement services at Folio Institutional, adds that “the interest in the Foliofn platform by RIAs has been growing by leaps and bounds, and we are introducing Folio(k) because of this and [to help] advisors to be competitive.”

Smith explains that plan sponsors as well as participants “are asking for more transparency, better diversification, and lower costs across the board.” That’s why Folio(k)’s “customizable portfolios of low-cost ETFs were developed with diversification and cost in mind. Participants actually own fractions of the underlying ETFs in a low cost, easy-to-use, Web-based 401(k). And fees can be deducted from plan assets, so there are no out-of-pocket expenses to the sponsor.”

According to Folio Institutional, the Target Date Folios reflect a far broader level of diversification than traditional target date funds, “which focus primarily or exclusively on domestic equities and fixed income and have proven to be costly and insufficiently diversified.” The Target Date Folios, include allocations to all the major asset classes. Moreover, the Target Date Folios are created with varying risk levels, including conservative, moderate, and more aggressive. Advisors, the firm says, may periodically rebalance account holdings and have the option of using Folio(k)’s updated model portfolio data as a resource. Advisors, Folio Institutional says, “can rebalance, add or delete securities, or change the weightings–easily across all accounts with one simple click. An entire basket of securities can be traded in one simple transaction with no commissions, transaction fees, or ticket charges.”


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