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Investment Fees Based on Participant Results

Investment Fees Based on Participant Results

Investment fees are a logical starting point for any fiduciary based conversation between a plan sponsor and an Investment Advisor.  At the 401kTV GENIE Award Program held in Chicago, Illinois, investment fees continued to garner air-time with plan sponsors and retirement plan advisors.  The 401kTV GENIE Award winner for the Investment Category was Chris Thixton of Pension Consultants Inc. (PCI).  PCI is making a difference for plan sponsors and plan participants when it comes to improving investment results and plan outcomes.

After the 401kTV GENIE Award Program, Chris Thixton, Retirement Plan Advisor at PCI, (Investment Category winner) was interviewed by Graham Thomas, Publisher of 401kTV.  During their conversation, Mr. Thomas and Mr. Thixton discussed the challenges facing plan sponsors when it comes to investment selection and generating favorable results for plan participants.  PCI has a unique process for both selecting investment options and charging their investment fees based upon the results.  Congratulations to Chris and the entire team at Pension Consultants Inc.

Full Transcript Here

Graham Thomas:
Hi, Graham Thomas, the publisher of 401kTV, coming to you live from the Chicago GENIE Awards. I’m here with Chris Thixton, with Pension Consultants, and who is a C(K)P and a lecturer at TPSU. Chris, congratulations on being nominated.

Chris Thixton:
Thank you very much.

Graham Thomas:
All right. Chris, is it okay if I ask you a couple of questions?

Chris Thixton:
Absolutely.

Graham Thomas:
All right. Regarding your fee structure, PCI has a pretty innovative structure there. Can you talk about that a little bit, please?

Chris Thixton:
Certainly. As we were talking on the panel, our full fee is only going to be realized when we achieve a certain result for the client. So specifically when it comes to an investment, we look at an objective performance standard, an all index lineup, and does the performance that we are providing for our clients, does it exceed that objective performance standard? And if it does, then we’ll earn our full fee. If not, then we won’t. And our clients like that. And I might add that, specifically, we are measuring the performance of an investment, not the fund’s performance, historical performance, but only the performance while the investment is in the plan lineup.

Graham Thomas:
So that’s obviously a massive differentiator. How much extra work does that add for you guys and have you found that plan sponsors appreciate it as a differentiator?

Chris Thixton:
So absolutely, they appreciate that. You think about the level of accountability that it brings to us. The plan sponsor likes that. And in terms of something else that we’ve done is, yes, it is a lot of additional work, once we do our research and we do our work and we do our reporting and it’s reviewed, we send it off and a third party data verification will review the information, verify that in fact, this is correct, before we send those results to the client. Again, bringing a level of transparency that we have not seen in the industry, which benefits the plan sponsor and ultimately the participants that we’re serving.

Graham Thomas:
There you have it, folks. Chris Thixton, PCI. Congratulations again.

Chris Thixton:
Thank you very much.

Graham Thomas:
C(K)P, TPSU lecturer. Thanks again. Stick around for more interviews from 401kTV.

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