Uncovering Opportunities in the Tax-Exempt Markets

A globe showing opportunities in the Tax-Exempt markets

Studies show that as of 2020, 45% of 403(b) plans still do not have an advisor helping them with their plan today. Watch this video and learn how tax-exempt entities differ from for-profit clients and how creative plan design can help increase your chances of getting hired on a tax-exempt entities retirement plan. Additionally, you will learn which type of firms to best partner with for prospecting opportunities. Last learn about OneAmerica’s history in working in the tax-exempt space and what OneAmerica’s unique capabilities are in working with the type of organizations.

Presenters:
  • Kara Kidney, Business Development Director- OneAmerica
  • Jennifer Jenkins - OneAmerica
All plans, not just tax-exempt plans, need good plan investment strategies. A professional advisor is expected to utilize good judgment and keep abreast of best practices. Above all the advisor should suggest strategies that allow for diversification and asset allocation without overloading the participant with too many choices.
 
Nearly half (45.3%) of tax-exempt plans now offer ESG investment options to participants as we see both nonprofit plan sponsors and participants with a growing interest in investments that align with the organizations mission and/or values.
 
Overall just under a third (27.7%) of tax-exempt plans offer investment advice to participants. This percentage increases as the size of the organization increases where only 11.5% of organizations with less than 50 participants offer investment advice compared to 39% of organizations with over 1,000 participants.
 
it is important for advisors to be mindful that investment choices inside a 403(b) plan are more restricted than those within a 401(k) plan. Except for special rules for certain church plans (code section 403(b)(9)) and grandfathered governmental plans (Treasury Regulation sections 1.403(b)-11(f) and (g)), 403(b) plans are limited to investing in 1) Annuity contracts and 2) custodial accounts holding mutual funds. Notably excluded are investments in CIT’s and separately managed accounts.

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