This is a detailed review of Confidential Planning, a lesser known 403(b) retirement plan provider. If you work in a K -12 school district with a 403(b) option, especially in the Tri-State area, there is a chance you have access to Confidential Planning on your district’s 403(b) provider list. We suggest reading 403b basics and our Teachers 403b Shopping Guide if you are unfamiliar with 403bs.
About this Review
The world of investments can be intimidating, but really it’s like any other shopping experience. You want to compare prices and features and understand exactly what you’re buying. This review will help you do that.
My goal is to make my review of this company platform as impartial and objective as possible. The review will cover the following information on Confidential Planning:
- Platform Overview
- Investment Options
- Fees & Expenses
- Features & Benefits
- Advantages & Disadvantages
How will this product review help you?
In this review you will:
- Learn about a lesser known provider that may be an available option at your school district.
- Familiarize yourself with the advantages of an open architecture structured 403b plan
- Understand how to compare this product’s fees, features, and benefits against other available 403(b) investments options to determine if it is priced competitively.
For readers who have found my website and don’t know much about me, I am a fee-only financial planner held to the fiduciary standard. I am legally obligated to make recommendations that are in the best interest of my clients. I’m also on a mission to inform teachers and other school district employees about the companies and products that are offered in the 403b marketplace. I am a financial advisor who does not advise or manage any client accounts at Confidential Planning.
This is a review, not a recommendation to buy or sell a mutual fund or variable annuity. Confidential Planning has not endorsed this review in any way, nor do I receive any compensation for this review. This review is meant to be an independent review at the request of a client so they can see my perspective when breaking down the positives and negatives of this an open architecture platform company. Before purchasing any investment product, be sure to do your own due diligence and consult a properly licensed professional should you have specific questions as they relate to your individual circumstances.
This information was gathered from Confidential Planning’s website –and is not a substitution for individual tax or legal advice. I’m just reporting on the main facts; to find answers specific to your situation may require a review of the full plan for applicable details.
Let’s get started.
Confidential Planning 403(b)(7) Plan Review
Confidential Planning is a 403b retirement recordkeeping platform currently acting as a provider in school districts in the United States. Confidential Planning is headquartered in Syracuse, New York; they have a strong presence throughout the northeast. Hundreds of school districts, hospitals, universities and non-profit organizations entrust them with providing retirement planning services for their employees.
|Type of product||403(b)7 custodial account/Mutual Funds|
|Platform Type||Open Architecture|
Confidential Planning, I, LLC is related to Pinnacle Investments, LLC. Pinnacle Investments, LLC is dually registered as a securities broker-dealer and investment advisor. Pinnacle Investments, LLC’s SEC File number is: 801-67860 and its CRD number is:142910
Other business activities and affiliations:
Pinnacle Holding Company, LLC is the parent company of 1) Pinnacle Investments, LLC, 2) Confidential Planning I, LLC and 3) Pinnacle Capital Management, LLC. Confidential Planning Corporation. Pinnacle Investments, LLC is affiliated with Pinnacle Advisors, LLC. Pinnacle Advisors, LLC is an SEC-registered investment advisor. The advisory services provided by Pinnacle Advisors, LLC are separate and distinct from the advisory services provided by Pinnacle Investments, LLC, or any other subsidiary of Pinnacle Holding Company, LLC.
Investment Options Overview
Open architecture is used to describe a financial institution’s ability to offer clients products and services. Open architecture ensures that a client can satisfy all their financial needs and that the investment firm can act in each client’s best interests by recommending the financial products best suited to that client, even if they are not proprietary products. Open architecture helps investment firms minimize the conflict of interest that would exist if the firm only recommended its own products.
Confidential Planning offers a multifamily fund menu of investment options inside their open architecture 403(b) platform. Investors have access to 28 mutual fund options including equity and fixed income portfolios as well as various target date retirement portfolios.
They offer access to thousands of no-load, no-transaction fee mutual funds on their 403(b) Multi-Choice program. Participants can customize the 403(b) Multi-Choice program to construct an investment portfolio based on your needs or overall financial plan. At any time, you may request to add (or delete) funds to your account based on availability at the 403(b) Multi-Choice.
Confidential Planning MultiChoice® 403(b) gives you access to some of the leading mutual fund families such as:
American, Blackrock, Fidelity, First Eagle, Janus, PIMCO,
T. Rowe Price, and Vanguard (28 Funds in total)
Fees & Expenses
Direct fees vs. Indirect fees
When working with Confidential Planning you will encounter administration fees and costs that are assessed to your account which will be direct as well as indirect. Direct fees are the contractual fees that are visible to the plan participants and generally include an annual custody fee and a participant fee charged by Confidential Planning. Indirect fees are fees charged by the mutual fund families that are netted against the value of that you have invested in each investment fund as part of the funds overall expense ratio and are not visible to you the participant.
Confidential Planning is compensated for their investment advisory services by charging fees for the percentage of assets that are under their management. These fees are paid by the participant:
Administration Custodial fee: 0.15% ($40 annually)
Confidential Planning charges a custody fee of 15 basis points (0.15%) of the account value annually for its recordkeeping services. These fees are assessed against the participant’s accounts monthly.
Annual Advisory fee: 1.0%
.25 to firm, .75 to advisor. The maximum annual asset fee charged will be 1.25% points for advisory services.
Management fees are separate and distinct from other fees that might apply, including transaction fees, underlying mutual fund fees and expenses paid to the fund by shareholders of the fund as outlined in each fund’s prospectus, and custodian fees.
Other Applicable, Transparent Plan & Participant-Level Fees:
- $50 loan initiation
- $75 per distribution processing
- $10 recurring distributions
- $25 check replacement
- Surrender fees: None
Underlying Portfolio Operating Expenses:
This is another ongoing fee charged for the investments inside of the mutual funds. The internal expenses of mutual funds range from 0.13% to 1.00%
Features & Benefits of Confidential Planning 403(b)
• The duty to have a reasonable,
independent basis for the
investment advice provided;
• The duty to obtain best execution
for a client’s transactions where the
Firm is in a position to direct
brokerage transactions for the
• The duty to ensure that investment
advice is suitable to meeting the
client’s individual objectives needs
and circumstances; and a duty to be
loyal to clients.
- Traditional 403(b)
- Loans available up to 50% of your account value with a $50,000 maximum
- Firm & representatives are held to Fiduciary Standard
Investment Platform Benefits:
- No proprietary funds
- Target date retirement portfolios
- Dollar cost averaging
- Transparent fee structure
- 403(b)7 custodial account platform offers access to low-cost mutual funds
Customer Service Benefits:
A wide range of account and investment data is available on Confidential Planning.
- Customized portfolio & rebalancing services
- Required Minimum Distribution Services
- Paper statements are mailed quarterly; however, statements can be accessed online.
- Financial Planning, Debt management, Retirement income planning
- Portfolio Analysis (Through Vanguard and Morningstar)
When working with an advisor, you should be aware of the various ways in which the adviser can be compensated. There are a few layers of fees at this vendor that you will need to be aware of.
- Direct Fees: Confidential Planning’s fees a 0.15% fee on assets & $40 per year.
- Indirect Fees: Investment fees will be the same. An expense ratio is the cost investment mutual fund companies charge investors to manage a mutual fund. The expense ratio represents all of the management fees and operating costs of the fund.
- Advisor / Sales Rep Compensation: Confidential Planning 403(b) accounts can only be set up and managed by an advisor that is affiliated with Confidential Planning or one of its subsidiaries. The way these advisors are paid for their services is on a fee-basis.
- Fee-based advisors: Confidential Planning’s advisors are fee-based financial planners are registered investment advisors with a fiduciary responsibility to act in their clients’ best interest. They do not accept any fees or compensation based on product sales. Fee-only financial advisors are paid directly by clients for their services, be it a flat fee, hourly rate or a percentage of assets under management, which adds up to 1.15% ibn total of a client’s portfolio value each year.
Advantages Of Confidential Planning 403(b)
- Fiduciary standard and DOL Compliant: K-12 403(b) plans are Non-ERISA, meaning they do not comply with the Employee Retirement Income Security Act of 1974. Confidential Planner’s adheres to the fiduciary standard, which means they must put the client’s best interest first.
- Also, as fiduciaries charging investment management they are required to have annual reviews with clients at least once a year
- Access to Vanguard’s Target Date Retirement Funds: These Target date retirement funds have a 72% lower average expense ratio then other mutual funds with similar holdings.
- The Mutual funds on this platform are load waived. So that any share class that isn’t an institutional share will rebate the upfront commission
- Fee Transparency: Confidential Planning has transparent fees, so you know how much it is going to cost you annually to use their platform. • Flexibility: Each client is given the opportunity to build a comprehensive financial plan and to work with a CFP if they so choose. No extra charge for planning services.
- Access to a CFP professional: Pinnacle Investments, LLC has several advisors with a Certified financial designation that will construct a basic financial plan at no additional charge. For those that have not done any financial planning, this may justify paying higher fees, especially if you are just starting out.
- Money Tree software is used to build financial plans. Clients have their own unique login and can adjust or review their plan at any time.
- Fee structure: They are not a low cost 403(b) provider. Their advisory platform fee adds up to 1.15% annually. But the total fees paid are closer to 1.50% and could be closer to 2% depending on which of the mutual funds that you invest in. This is comparable to other advisor directed vendors in the 403b marketplace, but the fees are much higher than some of the low-cost providers we have reviewed. (ex. Vanguard, Fidelity, Aspire )
- There is no self-directed account option if you work with Confidential Planning. This mean you must work with an advisor that is affiliated with Confidential Planning or one of its subsidiaries.
- Their platform only gives you access to 28 Mutual Fund options to invest in, this may or may not give you enough options to build a desired portfolio.
- Accounts cannot be set up or managed without a representative of Confidential Planning. This means you will have to find an in-house representative that you feel comfortable building a financial relationship with.
- You may already be working with a financial professional that you trust who helps you make investment related decisions, but you will still have to pay the advisory fees related to your CP account.
- They do not provide a Roth 403(b) option.
Conclusions on The Confidential Planning 403(B)
Confidential Planning is a company that offers a multi-fund family 403b platform. They are one of the few companies that offers an open architecture mutual fund platform available with TPAs.
Confidential Planning may work best for those who are seeking the following:
- The opportunity to work with an advisor that also has value added services ex. Financial Planning.
- Wants to turn over the responsibility of managing the investments to an investment advisor.
- Confidential Planning’s has a large presence in upstate or central region of New York. So, if you live in that area & want to meet face to face it might make sense to research them further.
Things to consider about this company’s platform:
- Un-avoidable fees:
- Custodial fees: 0.15% of your account value.
- Advisor fee: The combined advisory fee is 1.0% per annum. This fee is said to be is negotiable with the advisor, but we cannot confirm or deny that.
- Investment fund fees: These will vary depending on which funds are selected. Confidential Planning gives you access to some of the lowest cost funds available in the industry, but there are others that are on the higher side, so do your homework.
- There are no Surrender Charges to leave Confidential Planning’s platform, but some funds may have surrender charges.
- No death benefit fees are charged on any on the investment options on the platform.
When this investment might make sense:
If you don’t currently use Confidential Planning or another open architecture platform now may be a good time to take a look and evaluate these types of companies to see if they would be a good fit for your long-term goals. If you are interested in a more detailed analysis specific to your situation, feel free to contact me.
Thanks for reading this review. It’s always satisfying for me to provide some clarity on how they really work.
If you have an annuity or other financial product you’d like to see an in-depth review on just let me know, I’d be happy to take a stab at it. If you know a teacher or someone who is thinking about an annuity and might benefit from this post, feel free to forward it on to them via email.
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None of the third parties referenced in this communication are affiliated with Warwick Valley Financial Advisors, Private Advisor Group or LPL Financial.
This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.
No investment strategy, including asset allocation and diversification, assures a profit or protects against loss.
Mutual fund investing involves risk, including possible loss of principal.
The target date is the approximate date when investors plan to start withdrawing their money. The principal value of a target fund is not guaranteed at any time, including at the target date.