How is Horizon Resources Different?

How do you obtain objective advice?  Are all advisors the same?

If these are questions you have, you are not alone.  Very few plan sponsors understand the difference in the advice they receive from a provider, insurance agent, or broker versus the advice they receive from Horizon Resources.

The answer can be broken down into four categories:

• Employer
• Compensation
• Products
• Fiduciary Status
  

Employer:  A broker works for a broker dealer and is an agent for the broker dealer.  A provider representative likewise is employed by the provider.  They both represent their employer and not the committee. 

If you are buying a house, the real estate agent can only represent you or the seller, but can not represent both.  That would be an obvious conflict of interest.  How can the agent (or 401(k) broker) negotiate for the highest price (seller) and the lowest price (buyer) at the same time?

Horizon Resources is employed by the company or committee and is required by law to act in the best interest of our client.

Compensation:  Typically a broker can only be compensated through plan assets, specifically through 12b-1 fees or provider’s wrap fees.

Horizon Resources can be paid by plan assets (an approved ERISA expense) or by the plan sponsor directly.  How does this benefit our clients? We are not put in a position of manipulating share classes or mutual funds to be compensated.

Product:  A broker may represent his own firm’s product, some other retail provider, or possibly a third party administrated plan.  An insurance agent almost always represents an insurance plan.  A provider representative represents their product alone. Horizon Resources can work with any provider.

A question you should ask your advisor - “Could you work with Vanguard, Merrill Lynch and T. Rowe Price?”  If you are talking to a broker or insurance agent, the answer will almost always be NO.  How can they assist you in finding the right provider if some of the lowest cost and most well known names can not even be considered?

Fiduciary Status: Due to a number of conflicts of interest and self dealing issues, many brokerage firm brokers, bank brokers, and insurance agents can not sign a contract accepting fiduciary status with the committee.  Horizon Resources accepts fiduciary status.

The Results

Confidence.  Our clients have confidence that the advice they receive is not tarnished by biases or non-disclosed arrangements.

Next, see what requirements you should seek in an independent 401k advisor.

Click here to learn more about the potential conflicts of interest with brokers and advisors.