The decision to update our funds menu is a significant step toward providing a better retirement saving strategy for our 401(k) participants and IRA owners.
We know you probably have questions about how this will impact your investments moving forward. This guide shares answers to frequently asked questions about why this is happening and what this may mean for you.
Why is Guideline changing the funds selection?*
As a result of a review process by Guideline’s Investment Committee, certain changes are being made to the Guideline 401(k) and IRA investment menu.
As an ERISA 3(38) fiduciary and a Registered Investment Adviser (RIA) for our 401(k) plans, Guideline has a responsibility to act in the best interest of our plan participants. As part of this commitment, we look to reduce investment fees where possible so that individuals can save more toward retirement. However, these same principles apply to our IRA selections, as well.
As a result of the changes, expense ratio costs will decrease by almost 50% to 0.04-0.16% (or up to just $16 annually for every $10,000 invested). For our six managed portfolios, the blended expense ratios will decrease to 0.064-0.067%.
Although these amounts may not seem substantial, asset-based fees can create significant drag on the growth of your investments over time.
What are the specific changes you are implementing?*
We will be replacing 17 of our higher expense ratio funds with 15 lower-cost funds of similar performance. You can see a list of the fund changes here.
Note that the funds we are removing will impact only a small percent of our existing customer assets.
When will the funds menu changes go into effect?**
We will be migrating to the new funds between July 31 and August 11, 2023. While no action is required (unless you want to change investment options prior to the update), you can always revisit the Portfolio tab of your 401(k) or IRA and determine whether you’d like to use one of our six managed portfolios or select funds to create a custom portfolio.
If I receive an email about this, does that mean I’m impacted by the change?
No. Guideline is notifying all 401(k) participants and IRA owners about fund menu changes, whether it affects their current portfolios or not. This means your portfolio may not be changing, even if you received the email notification.
If these adjustments do not impact your portfolio, you are still able to include any new funds once they become available.
How do I know if this impacts me?
The majority of these changes will only impact 401(k) plan participants or IRA owners who have chosen to build a custom portfolio.
If you are invested in Guideline’s professionally managed Conservative or Moderately Conservative portfolios, then just one of the components of those funds will be impacted. No other professionally managed portfolios will be affected.
Additionally, our current cash account will be moving to a federal money market fund for everyone.
To review your current portfolio and fund selections, visit the Portfolio tab in your Guideline dashboard.
Do I need to do anything before the update?*
You do not need to take any action unless you want to change your investments prior to the transition.
If you have assets within the funds we are sunsetting, they will automatically be reallocated to the respective successor fund based on the table here as part of the nightly account rebalance process between July 31 and August 11, 2023. Per our Terms of Service, in the event your account has any pending trade activity, the rebalancing may be delayed until trade activity settles.
If you wish to make different investment choices, please access the Portfolio tab in your Guideline dashboard to make any desired changes among the available alternatives before 4 pm ET on July 28, 2023.
Find step-by-step directions on how to change your 401(k) and IRA investment portfolios.
If I don’t want the new funds selected for me, can I change them?
You can choose a different set of investment changes by accessing the Portfolio tab of your Guideline dashboard before 4 pm ET on July 28, 2023.
If you miss this deadline, your assets will automatically be reallocated to the respective successor funds; however, you can always make changes to your investments any time after the migration within the then-available investment options.
Find step-by-step directions on how to change your 401(k) and IRA investment portfolios.
Can I keep my funds in their current investments?
You may keep your assets invested in funds that are not being impacted.
If you currently hold any funds that will be removed or migrated, you will not be able to keep those investments. We will automatically reallocate those assets to the respective successor funds or you can manually choose your new funds within the Portfolio section of your Guideline dashboard to any of the funds remaining on the investment lineup.
* This information is general in nature and is for information purposes only. It should not be construed as investment advice. Investing involves risk and investments may lose value. Consult a qualified financial adviser.
**This information is general in nature and is for information purposes only. It should not be construed as investment advice. Consult a qualified financial adviser.
The expense ratio information provided is accurate as of April 17, 2023. See our Form ADV 2A Brochure for more information about our fees.