Guideline is an investment advisory firm headquartered in San Mateo, California with more than $1 billion in assets under management (AUM). The firm has more than 5,800 clients, all of whom are employer-sponsored retirement plans. Guideline currently provides only 401(k) plan services, which means it does not offer individual investment advice or financial planning services. However, the company indicates on its website that is soon adding individual retirement accounts (IRAs) to its repertoire.
Guideline is a fee-only firm. This means that all of its earnings come from advisory fees paid by clients. Conversely, a fee-based firm may earn income from additional sources, such as insurance and securities commissions.
Guideline was founded in 2015 by CEO Kevin Busque, chief technology officer (CTO) Mike Nelson and chief designer 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 two of Guideline’s more than 100 employees actually deal with investment management and advising, though.
What Types of Clients Does Guideline Accept?
Guideline works exclusively with employer-sponsored retirement plans. While Guideline does not maintain advisory relationships with any individuals, it does work indirectly with participants of the plans it manages.
Guideline Minimum Account Sizes
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 a program called “Guideline for Advisors.” This allows third-party advisors to assist with managing the accounts of mutual clients. While Guideline doesn’t receive any income from this program, its clients may encounter fees from the aforementioned third-party advisors.
Based on information from the firm’s website, the company is looking to offer IRA plan services in the near future.
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.
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
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 application||$75 per year|
|Qualified domestic relations order (QDRO)||$500|
|Overnight mail (within U.S.)||$50|
What to Watch Out For
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.
Guideline has no disclosures listed on its Form ADV, meaning it has a clean legal and regulatory record.
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.
Where Is Guideline Located?
Guideline is headquartered in San Mateo, California. It also operates offices in Portland, Maine and Austin, Texas.
All information was accurate as of the writing of this article.
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