WHILE MANY EXPERTS are expecting fewer providers in the 401(k) market, there are signs that many providers like Symetra still see great opportunities and are willing to invest.  Created out of a division of Safeco that was purchased by Warren Buffet’s Berkshire Hathaway group and White Mountain Insurance, they have recently filed for IPO.  Symetra offers advisors some unique features and reasonably priced plans for smaller companies and is one of the few that supports the RIA model in that market.

With 1,700 plans and $650 million in 401(k) assets, Symetra is clearly in a growth phase.  Recordkeeping is performed inhouse with RSM McLadrey performing compliance and administration in their bundled program, with outside TPAs employed in an unbundled model.  Symetra offers a non-proprietary mutual fund platform available with investments screened by Mesirow who will act as co-fiduciary.  Symetra offers indemnification to sponsors using funds from their elite list.  Their levelized compensation payment formula offers R shares that pay a 1% finders fee and immediate 25 basis point trail or an immediate 35 basis point trail; A Shares pay 50 basis points and 15 basis point trail or a 20 basis point trail. 

RIAs can be paid from an account set up and administered by Symetra with specific instructions from the sponsor as to what to pay their advisor. A brokerage window which includes 200 ETFs is offered through Sharebuilder.  Symetra offers multiple options for participants to consider.  They have risk-based allocation through American Century as well as risk-based models selected by Mesirow Financial.  In addition, they offer time horizon-based funds through the Fidelity Freedom Funds.   Advisors can use their own glide path to create asset allocation models.  The average expense ratio for R Shares is 130 basis points and the $5 per quarter per participant fee is waived for plans with an average account balance over $10,000.  TPA fees are billed separately.

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