Guideline is an investment advisory firm headquartered in San Mateo, California, with almost $1.8 billion in assets under management (AUM). The firm manages more than 13,000 client accounts, most of which are employer-sponsored retirement plans, with the rest being individual retirement accounts (IRAs). Guideline currently provides only 401(k) plan and IRA services, which means it does not offer financial planning services.
Guideline is a fee-only firm. This means that all of its earnings come from the advisory fees paid by clients. Conversely, a fee-based firm may earn income from additional sources, such as insurance or securities commissions.
Guideline was founded in 2015 by CEO Kevin Busque, chief technology officer (CTO) Mike Nelson and chief procurement officer (CPO) Jeremy Caballero. It’s primarily a company that sponsors 401(k) retirement plans, providing employers with a full-stack product that handles plan administration, automated compliance and investment management. Only a handful of Guideline’s employees actually deal with investment management and advising, though.
Guideline Client Types and Minimum Account Sizes
Guideline typically works with employer-sponsored retirement plans and their participants. However, the firm has also added IRAs to its offerings, through which it works with some individuals.
There are no minimum account size requirements at Guideline.
Services Offered by Guideline
The hallmark offerings at Guideline are its plan administration, record-keeping and investment management services that it provides to employer-sponsored retirement plans. It can select and monitor investments and portfolios for these plans as well. Guideline has also created its own proprietary software that allows it to recommend investments to participants of the employer-sponsored retirement plans it works with.
Guideline also offers two other programs called “Guideline for Advisors” and "Guideline for Accountants." The former allows third-party advisors to assist with managing the accounts of mutual clients. Meanwhile, the latter program includes a turnkey 401(k) service that accounting businesses can offer their clients.
Guideline now offers IRA services, which allows clients to open an IRA account with the firm directly. Monthly fees range from $2 to $5 depending on your account's balance. More than 40 mutual fund investments are available through Guideline's IRA program.
Guideline Investment Philosophy
Guideline subscribes to modern portfolio theory (MPT), a popular investment philosophy that emphasizes asset diversification to maximize returns for a given level of risk. MPT can also be used to minimize risk for an expected level of return. To implement this strategy effectively, Guideline offers plan participants “low-fee investments with different risk, covariance and return characteristics,” according to its Form ADV brochure.
As a 401(k)-centric company, it’s no surprise that Guideline heavily tailors its investment approach to optimize long-term results. In other words, the firm doesn’t worry about maximizing short-term earnings, focusing instead on consistent growth over longer periods of time.
Fees Under Guideline
For its 401(k) services, Guideline charges employers a base fee of between $39 and $99 each month. Additionally, each plan participant adds an additional $8 in monthly fees. The firm doesn’t charge plan participants a monthly fee for maintaining a 401(k) account. However, certain services like a distribution, refund or loan application may come with a one-time fee.
Here’s a full breakdown of the fee schedules plan sponsors and participants will face:
|Plan Sponsor Fees|
|Base fee (monthly)||$39 or $99, depending on your plan|
|Plan participant fee (monthly)||$8 per employee|
|Service wind-down fee||$250|
|ACH chargeback/reversal fee||$50|
|Extraordinary services fee||$300 per hour|
|Plan Participant Fees|
|Distribution or refund||$50|
|Loan maintenance||$75 per year|
|Qualified domestic relations order (QDRO)||$500|
|Expedited mail (within U.S.)||$50|
For Guideline's IRA services, monthly fees vary depending on your account's balance. For accounts with $10,000 or less in them, the monthly fee is $2. On the other hand, if your account balance surpasses $10,000, then the monthly fee will jump to $5.
What to Watch Out For
Guideline has no disclosures listed on its Form ADV, meaning it has a clean legal and regulatory record.
Guideline’s services for employer-sponsored retirement plans are not your standard set of individual investment management and financial planning offerings that you’ll find at most financial advisor firms. As a result, if you’re in need of either of these individual services, Guideline won’t be a good fit for you.
Opening an Account With Guideline
If you’re an employer looking for a 401(k) plan administrator, you can call Guideline at (888) 228-3491 or email the firm at firstname.lastname@example.org.
Guideline is headquartered in San Mateo, California. It also operates offices in Portland, Maine and Austin, Texas.
All information is accurate as of the writing of this article.
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