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BenefitStreet launches direct exchange traded fund 401(k) platform

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BenefitStreet, a 401k record keeper and benefit solution provider, and leading exchange-trade fund provider Barclays Global Investors have unveiled a new 401(k) solution featuring iShares

BenefitStreet, a 401k record keeper and benefit solution provider, and leading exchange-trade fund provider Barclays Global Investors have unveiled a new 401(k) solution featuring iShares ETFs that is now available to US companies that sponsor employee pension plans and independent advisers.

The BenefitStreet ETF system is designed as a cost-efficient way of delivering ETFs directly to investors, rather than requiring the use of unitisation or collective trusts. The platform places trades at the fund level to minimise commission costs across the entire platform with full pricing transparency down to the participant level, allowing plan sponsors and their employees to benefit from lower institutional pricing.

‘We developed this new platform in response to the regulatory changes taking place in the 401(k) industry calling for lower fees and more fee transparency in defined contribution plans,’ says BenefitStreet co-founder and senior vice president Ken Weida.

‘Our mission is to empower our clients and their families through innovation and access to the best benefit solutions. This is the latest example, by providing a high quality ETF 401(k) solution at a very low delivery cost in a way that is fully transparent.’

Michael Latham, managing director and head of iShares in North America, says: ‘This is a breakthrough in the delivery of iShares funds to the sizable 401(k) US market at a time when transparency and low total cost are critically important to plan sponsors and advisers.

‘BenefitStreet in partnership with iShares funds brings a new option for plan flexibility, cost efficiency and technical expertise that make managing non-taxable accounts even more attractive for advisers.’

The availability of iShares funds on this platform allows advisors who have been offering ETFs to their clients with taxable accounts to offer these investment options to their 401(k) clients. Through this proprietary system, advisors will be able to construct asset allocation portfolios using iShares funds on behalf of plan participants.

ETFs in 401(k) plans can provide precise asset allocation and lower management fees than other investment alternatives. Initially iShares funds will be offered exclusively as the investment choices in BenefitStreet’s ETF 401(k) platform, with other ETFs being added over time.

Founded in 1993 in San Ramon, California, with 12 locations throughout the US, BenefitStreet offers benefits management and administration solutions to more than 7,100 corporate clients. BGI, a subsidiary of Barclays Bank that created the first index strategy in 1971 and the first quantitative active strategy in 1979, offers more 190 iShares ETFs to institutions and individuals in 15 countries.

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