Expand Your Retirement Plan Offerings

The unitization service1 on our platform expands what plan sponsors can offer as customized, cost-effective investment choices to their 401(k), 403(b), and other retirement plan participants.

Plan sponsors can broaden their product selection by transitioning from mutual funds to diversified model portfolios consisting of mutual funds, exchange-traded funds (ETFs), and/or individual stocks through unitization. That means investment advisors, model managers, and recordkeepers can now offer truly tailored and lower cost portfolios—including allocations of model portfolios—to retirement plan sponsors and participants.


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Benefits for Recordkeepers

Low Cost: Portfolios can be offered cost effectively to retirement plans of all sizes.

Online Access: Fully transparent, online access.

Disclosure of Fee Accrual Information: Select from multiple, automated fee accrual and invoicing arrangements with accruals disclosed to recordkeepers, plan sponsors, and plan participants.

Daily Valuation and Easier Trading: Because unit values are downloaded to the recordkeeper daily, the plan sponsor and plan participants can see their updated account balances each day. Trade portfolios of ETFs and/or equities as easily as mutual funds with daily valuation.

Simplicity: Unlike traditional mutual funds and Collective Investment Trusts (CITs), unitization does not require National Securities Clearing Corporation (NSCC) registration or significant assets under management.

Benefits for Plan Sponsors

Create More Investment Options: Retirement plans can provide additional customization and diversification for plan participants by offering non-traditional products, such as ETFs and mixed investment portfolios.

Access to More Investment Managers: Many investment managers don't trade or use mutual funds. Plan sponsors can access a broader selection of investment managers that now can include those who specialize in the management of mixed investment portfolios that may include ETFs and equities.

Model Customization: Advisors and investment managers can easily update and rebalance portfolios, using our powerful model management tools. With Folio's unique platform, portfolios can include fractional shares of ETFs and individual stocks.

Lower Plan Costs: Unitization creates NAV-style investment vehicles that can represent a more cost-effective alternative to mutual funds and Collective Investment Trusts.

Benefits for Plan Participants

Expanded Plan Offerings: Plan participants can be offered a mixed portfolio from a wide selection of funds, ETFs, and/or individual stocks. 

Potential for Better Returns: Investors can reduce risk and earn higher returns by diversifying and combining asset types that do not move in tandem with each other2.

Interested in learning more about the unitization service on the Folio platform?

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1 unitZXchange (uZX), headquartered in Fredericksburg, VA, provides a service for creating a net asset value (NAV) of portfolios made up of various types of assets. Recordkeepers and trustees can use this NAV to facilitate trading of assets that are otherwise difficult to trade in retirement plans. This is particularly relevant in daily recordkeeping of 401(k), 403(b), non-qualified, and other individual account retirement plans. Unitized portfolios are denominated in units similar to how mutual fund shares are priced. They usually consist of an asset (or group of assets in a portfolio of securities) which combines with cash equivalent offerings to facilitate trading and settling of unit trades.

uZX's principals have more than 75 years of experience in the investment and retirement plan field. They have been unitizing retirement accounts for more than 15 years, including company stock, managed portfolios, managed separate accounts, and group annuity contracts. uZX's staff has unitized assets in excess of $850 million with individual accounts ranging from $100,000 to $100 million.

2 Angus, J., Brown, W. O., Smith, J. K., and Smith, R. (2006 Draft), What's in Your 403(b)? Academic Retirement Plans and the Costs of Underdiversification; Considine, Geoff, Ph.D. (2008) What is Diversification Worth? (PDF)