Town Lake Capital Management is an registered independent investment advisor based in Austin, Texas. As a plan consultant, we leverage our asset allocation expertise to provide plan sponsors with a 401k plan that fulfills their fiduciary duty to employees through fee minimization, increased diversification and employee guidance.

Fee Transparency: Growth of $50,000

Plan sponsors often do not know the true cost of their 401k plan. Between custody, third party administration, consulting and mutual fund fees, plan participants can experience a drag on their investment returns of over 2% annually. Town Lake Capital Management provides an estimate of fees up-front. In addition to our transparency, Town Lake Capital utilizes low-cost index funds. In an illustration of fee minimization on participant account balances, a 1% difference in fees applied annually can equate to more than $240,000 increase in assets at retirement.

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Allocation: Endowment Model Implementation

We are more proactive than our peers in our consultation with 401k plans. Detailed quarterly updates are provided to clients to reflect changing market dynamics. Our firm provides a more nuanced list of investment options that help participants to create an endowment style portfolio.

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Unbundled: Conflict-Free Management

Town Lake Capital offers an unbundled approach to 401k management. Unbundled means that there are fewer conflicts of interest within the plan. Unlike our peers, Town Lake Capital Management will not recommend to clients proprietary funds or products. Unbundled plans separate custody, administration and investment management and each are chosen on the basis of cost and value.

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Employee Guidance: Model Portfolio Options

Town Lake Capital offers employees a number of diverse asset allocation models to suit their needs. Each employee can choose their investments according to their risk tolerance and stage of life. We provide employees with educational materials to help them make an informed decision about which model portfolio is suitable for their situation.

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Index Investing: Underperformance of Active Mutual Funds

Research has shown that over the past 30 years, less than 1/3 of active mutual funds have outperformed their benchmark. Because we believe investing is a zero-sum game, collectively participants may lose by the amount it costs to play. This is why passive indexing has historically outperformed active mutual funds over long time periods.

The graph to the right depicts research from the following article: Salmon, Felix. “Charts of the Day, Mutual-fund Outperformance Edition.” Weblog post., 11 Sept. 2012. Web. 06 Feb. 2013.

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Fiduciary Duty: Fulfill Your Legal Obligation to Employees

Employers should fulfill their fiduciary duty to employees by offering a 401k plan that is free of conflicts, properly diversified and cost effective. Town Lake Capital Management helps employers meet these requirements through our low-cost unbundled plan.

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