Optimize Your Retirement Plan Practice

Leveraging Integrated Data Solutions

White Paper

Addressing five of Todays Top Retirement Plan Challenges

How can I help my employees save enough for retirement? Are the investment options my plan offers appropriate to help meet my employees retirement goals? How can I make my companys 401(k) plan more effective for my employees? Who can help my company meet increasing regulatory requirements for the retirement plans we offer?

These difficult questions are ones that your plan-sponsor clients are faced with day in and day out. Theyre just a few of many that illustrate the increasing need for knowledgeable and experienced retirement plan advisors. Abundant news and research shows the great dividemany Americans arent ready, or on track, to retire at all, let alone comfortably. As a retirement plan leader, you need to focus more than ever on solutions that may allow employers to narrow that divide for their plan participants. Helping employers answer these tough questions has become more complicated than ever. While many advisors have offered fiduciary guidance, plan benchmarking, investment selection and monitoring, fee disclosure, plan design assistance and other services for some time, the current plan landscape requires more efficiency and transparency than ever before:

Regulatory changes and industry trends have placed more demands on plan sponsors, requiring them
to prove that theyre making the best possible choices for their employees and support optimal retirement readiness. Participants best interests are the ultimate focus, and documenting processes to support this need is an increasing demand.

Plan sponsors are turning to advisors to help them meet these requirements. In many cases, this
equates to additional services provided for the same (sometimes less) compensation.

To support all of these needs, retirement plan advisors such as you and your peers are increasingly
looking for ways to streamline processes and integrate time-saving solutions that allow them to not only win new business, but also maintain and deepen existing client relationships. To address the ever-increasing demands made on you, industry leaders are creating technologies that automate processes such as plan design and benchmarking, integrate necessary investment data for faster due-diligence processing, and support streamlined office workflows. The effort saved by automating formerly manual tasks frees up valuable time and resources, and allows you to more easily show your value proposition to clients. Access to fully automated, integrated tools and systems is the key to maintaining a competitive edge, allowing you to support your retirement plan clients more effectively. The LPL Retirement Partners Tool Suite is a leading offering in the industry that addresses all of the challenges mentioned so far in a completely automated solution. The pages that follow present five of the top challenges you face today, and illustrate the LPL Retirement Partners solution for addressing them, while exponentially increasing your value to your clients.

OPTIMIZE YOUR RETIREMENT PL AN PRACTICE 2

How It Works
LPL Financial internal analysts actively examine the market to compile precise, up-to-date quarterly investment duediligence reports on more than 50,000 investment vehicles, including:

1 | Investment Due Diligence

Challenge:
Fiduciary standards require plan sponsors to demonstrate and document how plan assets are monitored for performance. Investment due-diligence reporting can be a time-consuming, costly and laborintensive process.

One-Page Scorecards Market Commentaries Pertinent Market

Analysis Exhibits

Solution: Automated Investment Due Diligence

LPL Retirement Partners offers institutional-level investment analysis combined with a seamless process to help advisors spend less time with non-dollar productive tasks. Our experienced team of analysts provides you with access to the proprietary research needed to effectively evaluate investment lineups at the push of a button. This powerful due-diligence data is also incorporated into our customized salesforce.com CRM tool and the LPL Financial advisor workstation, BranchNet, via automated data feeds.

Platform Due-Diligence Books Target-Date Fund Analyses Blue Ribbon and Watch Lists Key Benefits Institutional-quality research available
for any size plan

Our proprietary scoring system provides you with a single point from
which to measure and evaluate the generalhealth of a plan option.

Access to a team of experienced analysts Holdings-based investment analyses Well-documented processes to help
comply with plan fiduciary standards.

Proprietary institutional-level scoring methodology factors in style,

risk-return, peer-group and qualitative analyses.

In conjunction with Morningstar, Inc., we review and produce

analyses on more than 50,000 investments each quarter.

Full integration within all LPL Retirement

Partners tools and technology

Our custom screening tool allows you to access, screen and report on
any of the scored investments with just one click or swipe.

OPTIMIZE YOUR RETIREMENT PL AN PRACTICE 3

How It Works
You, the user, create a profile for each client in the system, including the plans current investment selection, and then choose the criteria by which you want the plans investments to be monitored. Once in place, you can generate executive-level reports supported by a plan-specific investment policy statement in minutes. Additionally, the system will automatically monitor the investment options on an ongoing basis, notifying you of changes in performance.

2 | Plan Documentation
Challenge:
Fiduciary best practices mandate a documented process for investment selection, conducting prudent reviews and ongoing monitoring to assure that investments continue to meet the standards established in the plans Investment Policy Statement (IPS). Creating and monitoring multiple investment lineups and reports is tedious, and documenting and reviewing plan activity and investment performance is timeconsuming without a systematic and repeatable process in place.

Solution: Online Fiduciary Monitoring

LPL Retirement Partners has partnered with the Center for Fiduciary Management to offer the LPL Retirement Partners Fiduciary Monitoring System. This advanced system is an online tool designed to facilitate three key fiduciary investment obligations:

Key Benefits Save time by streamlining investment

review, monitoring and reporting.

Receive automatic warnings

when investments do not meet established criteria.

Determine whether investment options are meeting the objectives

stated in the IPS.

Reduce fiduciary liability by creating a

documented, repeatable process.

Document the analysis, and any decisions or actions arising as a

result of the review.

Get automatic updates of investment

lineups, asset amounts and participant counts each month.

Facilitate regularly scheduled formal reviews and timely decisionmaking on a quarterly basis.

Customize images and scoring

methodology used throughout the report.

Add custom sections to your

reports, either en masse or for each individual client.

Quickly assess investment selections

against established criteria, and identify any failing investments.

Easily select and maintain investments

that meet your criteria.

Monitor investment options based on

the LPL Financial proprietary 12-point scoring system.

Enter custom commentary for each

investment option, by plan or across your entire book in seconds.

Access the system from your iPad

or computer.

OPTIMIZE YOUR RETIREMENT PL AN PRACTICE 4

How It Works
PDOR puts data in front of your plan sponsor that is critical to making important plan-design decisions. It provides easy-to-understand charts and graphs that help convey important information to plan sponsors for all eligible participants in the plan:

3| Plan Design Assistance and Retirement Readiness

Challenge:
You seek to support plan design features that serve participant needs, meet plan sponsor budgets and help plan sponsors comply with a growing number of industry regulations. Obstacles to data collection and aggregation hamper your ability to fully demonstrate the value you bring to plan-design assistance for both current and prospective clients.

Retirement Readiness Calculations A

Retirement Readiness Ratio is calculated for each participant based on his/her individual circumstances.

Solution: Plan-Design Optimization ReportTM

LPL Retirement Partners, in partnership with Fiduciary Benchmarks, offers advisors the innovative Plan Design Optimization Report (PDOR) TM service. PDOR presents a customized plan design that seeks to maximize participant deferrals within the employers available budget by combining insights from the field of behavioral finance, and input from the plans fiduciaries.

Retirement Risk Calculations A new

concept called Minimum Required Rate of Return (MR3) analyzes the rate of return a participant needs to retire comfortably, similar to liability-driven investing for defined benefit plans.

Investment Behavior Analysis An

assessment of each participants investing behavior is made for purposes of professional asset allocation, automatic rebalancing and quality of diversification.1 In addition, you have the option to include two alternative potential plan design scenarios based on your knowledge of each clients objectives and demographics. The service works by demonstrating the clear link between the following:
Small Plan Design Better Participant Success Measures Better Potential Retirement Outcomes

Key Benefits Improve your value proposition by

adding significant amounts of quantifiable value.

Increase project revenue by providing

innovative and customized consulting services.

Improve prospecting capability

with differentiable services that truly add value.

Support plan sponsors responsibility

for acting in the sole interest of plan participants and their beneficiaries.
1

A sset allocation and diversication do not ensure a prot  or protect against a loss. OPTIMIZE YOUR RETIREMENT PL AN PRACTICE 5

How It Works
The Fee Comparison and Analysis Evaluation uses your clients existing plan data within the Fiduciary Monitoring System, combined with additional relevant statistics, to create a comprehensive report that includes a fee analysis of:

4 | Fee Benchmarking
Challenge:
The DOL requires plan sponsors to document and demonstrate that their plans charge reasonable fees aligned with industry standards. As an investment fiduciary to the plan, you are expected to leverage your knowledge and experience in helping plan sponsors determine whether the costs associated with employer-sponsored retirement plans are reasonable. However, accessing and analyzing fee data and ensuring validity of the data demands a seamless and scalable automated process.

Investment management fees Recordkeeping fees Advisor/consultant fees Total plan fees Plan benefits and features Key Benefits A streamlined and automated approach
to fee and expense analysis.

Solution: Fee and Analysis Evaluation

The LPL Retirement Partners Fee Comparison and Analysis Evaluation, powered by peer-group data from Fiduciary Benchmarks, allows you to quickly and easily compare plan feesalong with value and design complexityagainst an appropriate peer group. The report is compiled in a format that plan sponsors can quickly read and understand and is integrated within the LPL Retirement Partners Tool Suite. This allows you to leverage automated data feeds and existing plan data to drive efficiency and automation in your practice.
3.

Leveraging of data previously input into

the system.

Full integration within the LPL Financial

Fiduciary Monitoring System.

Large market analysis available for any

size plan.

Sample Company Plan Plan Fee Summary and Peer Comparison

Service Provider
Total Plan Fee

All data as of 9/30/11 unless otherwise noted

On-demand reporting and clientfocused output.

Fees
$23,693 0.96%

Comparison to Peer Group

1.07%

1.34%

1.7%

Comprehensive analysis to help

understand a plans fees, which provides a record to verify due diligence.

Recordkeeper

$8,000

0.32%
0.34% 0.47% 0.7%

Advisor/Consultant

$3,697.5

0.15%
0.25% 0.3% 0.5%

Clear understanding of plan value

provided, compared with pertinent peer groups.

Investment Managers Managed Account Providers Other Service Providers

$8,298

0.34%
0.75% 0.99% 1.13%

$2,465 $1,232.5

0.1% 0.05%

See Important Information and Disclosures at the end of this document for additional information, including key considerations about the FBi Peer Group data reflected in this report.

Investment News: 2013 Adviser Technology Study OPTIMIZE YOUR RETIREMENT PL AN PRACTICE 6

How It Works
Client-specific requirements, along with the advisors comments, is leveraged to systemically create report results customized to each customer. After selecting the incumbent provider and other well-suited platforms to benchmark against, you can electronically send out the request for proposal (RFP) to those providers right through the system. Once the providers have answered the request through RFP Director, you can generate an easy-to-read report in seconds. Finally, once a decision has been made, simply select the winning proposal to automatically create the plan or lineup change in the Fiduciary Monitoring System.

5 | Provider Benchmarking
Challenge:
The retirement plan provider-review process can be time-consuming, confusing and frustrating. All too often, standard vendor-provided proposals do not include enough information to evaluate administrative, recordkeeping, compliance, and employee communication services and standards. Furthermore, total plan costs are often impossible to identify from the face of proposals, leaving you comparing apples to oranges with respect to different provider formats.

Solution: RFP Director

LPL Retirement Partners has partnered with the Center for Fiduciary Management to create a proprietary plan provider analysis and benchmarking tool called RFP Director, which integrates seamlessly with the Fiduciary Monitoring System.

RFP Director maintains robust data, and conducts comprehensive

research, on retirement plan providers and investment managers.

Key Benefits Streamlined, time-saving RFP process

that generates reports in minutes.

Employers who choose to evaluate their plan providers on

fundamental product, service and cost components will find this program to be an integral part of their documented due-diligence process. RFP Director offers a powerful research and analysis tool that provides transparency to identify pricing options and service enhancements for each provider. And because it is fully integrated with the LPL Financial Retirement Partners Fiduciary Monitoring System, you can easily move data and investment lineups from the RFP to the due-diligence process without any additional data entry.

Access to apples to apples

comparisons of provider capabilities.

Ability to demonstrate professional

capabilities by presenting completely customized and data-rich RFPs.

Advisor and client customization allows

for adding custom questions, and to indicate as required or preferred.

Ability to assign a numerical weight

to evaluation categories based on sponsor needs.

Choice of which sections to include, and

order of report sections.

Integration with the Fiduciary

Monitoring System allows seamless and automatic creation of plans and lineups chosen.

Fully customizable output.

OPTIMIZE YOUR RETIREMENT PL AN PRACTICE 7

The tools highlighted in this white paper allow you to alleviate manual data entry of assets, investment options and other key plan datasaving time and resources. Additional reports allow you to track services performed, seamlessly aligning services to commitments outlined in client agreements and plan documents. Finally, all reports and plan information are stored and electronically shared via an interactive client portal, completely customized for each client and available to plan sponsors 24/7. LPL Financial gives you the tools you need to help grow your practice. Our retirement plan experience and comprehensive1 service provide you with the opportunities you need to pursue even greater success. Get in touch with LPL Retirement Partners to learn more about the Tool Suite and our 95% payout.2

About LPLFinancial
LPL Financial, a wholly owned subsidiary of LPL Financial Holdings Inc. (NASDAQ: LPLA), is the nations largest independent broker/dealer (based on total revenues, Financial Planning magazine, June 19962013), an RIA custodian and an independent consultant to retirement plans. LPL Financial offers proprietary technology, comprehensive clearing and compliance services, practice management programs and training, and independent research to approximately 13,500 financial advisors and 700 financial institutions. In addition, LPL Financial supports over 4,500 financial advisors licensed with insurance companies by providing customized clearing, advisory platforms and technology solutions. LPL Financial and its affiliates have approximately 3,000 employees, with headquarters in Boston, Charlotte and San Diego. For more information, please contact an LPL Financial representative at (888) 250-2420 or www.joinlpl.com. LPL Financial provides the freedom, flexibility and scalability you require to grow your business in the direction you choose. Our universal platform supports any business model.
1 2

2012 PLANSPONSOR Consultant Survey of 58 firms that offer guidance to plan sponsors. Only fee-based qualified retirement plan advisors acting in a fiduciary capacity are eligible for the 95% payout.

Securities and advisory services offered through LPLFinancial, a registered investment advisor, member FINRA/SIPC. LPL Financial Retirement Partners is the retirement plan-focused division of LPL Financial. Morningstar, Center for Fiduciary Management, Fiduciary Benchmarks and LPL Financial are not afliated entities.

RP-0022-0314 Tracking #1-250097 (exp. 03/16)