An Independent Review of Aspire Financial 403(b) retirement plan platform

Dear Reader,

If you are like many school district employees, there is a good chance you are using a 403(b) plan as a supplement to your pension in order to build a healthier retirement.  Many of you probably signed up with a sales rep or agent that came to visit your school offering their proprietary product. Perhaps they bought you lunch in the teacher’s lounge and gave a short presentation about the 403(b) basics. You listened and absorbed as much as you could, but there is a chance that all your other provider options were not fully presented to you.

Aspire does not employ or compensate a sales staff to go into school districts and solicit participants. Aspire mainly derives new business by either a participant contacting them directly or through independent investment advisors, so many school district employees probably have never had a chance to learn about the benefits of using Aspire Financials’ 403b platform.

This is a detailed review of Aspire Financial, a lesser known 403(b) retirement plan provider.  If you work in a K-12 school district with a 403(b) option, there is a chance you have access to Aspire Financial on your district’s 403(b) provider list. 

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 Aspire Financial:

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  
  • Make you aware of one of few “do it yourself” retirement plan options that could help you reduce your fees and expenses vs. other advisor directed plans.
  • 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.

About Me

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 have clients that use this company & I am a financial advisor who is approved to manage accounts at this Aspire Financial. 

Legal Disclosure

This is a review, not a recommendation to buy or sell a mutual fund or variable annuity. Aspire 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 Aspire Financial’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.


Aspire Financial 403(b)(7) Plan Review

Platform Overview

Aspire Financial is a company that offers a multi-fund family platform in the 403b marketplace.   Aspire is an open-Architecture retirement recordkeeping platform currently acting as a provider in over 3,500 school districts in the United States.  They have been in the 403(b) marketplace since 2012.

Product NameAspire Financial 403(b)(7)
Type of productMutual Funds
Platform TypeOpen Architecture
Phone Number866-634-5873
Websitewww.aspireonline.com

Investment Options Overview

Aspire is one of the few companies that offers an open architecture mutual fund program which allows plan participants to manage their own accounts or to work with the advisor of their choosing, the investments of their choosing, and money managers or investment strategists of their choosing.

Aspire Financial offers a wide range of investment options inside their platform. Investors have access to over 10,000 investment options including numerous equity and fixed income portfolios as well as various risk based asset allocation and target date portfolios.

They offer access to thousands of no-load, no-transaction fee mutual funds on their 403(b) FundSourceSM program.  Participants can customize the 403(b) FundSourceSM 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) FundSourceSM custodian.

Aspire gives you access to some of the leading mutual fund families such as:

Vanguard, Fidelity, Blackrock, Invesco, DFA, American, MFS, Oppenheimer, PIMCO, Franklin Templeton and  T Rowe Price (500 in total)

They also offer a guaranteed interest option and professional money management.

Mutual Funds – FundsourceSM
Prudential Guaranteed Interest Option*
Professional Money Management
Aspire makes available a selection of more than 10,000 mutual funds from over 500 fund families.
This includes those share classes available from the associated fund family. Some funds may require certain minimum contribution levels in order to meet institutional share class availability. Aspire does not have proprietary mutual funds.
Aspire partnered with Prudential to develop an unallocated fixed-annuity that trades like a mutual fund. All money receives the same rate of return, making it easier for a participant to understand the crediting rate.
There are no transfer restrictions associated with the option. There are also no surrender charges. The option is not available in every state and is only offered through advisors who are insurance-licensed and have an appointment with Prudential.
*May not be available in all states.
By using third-party investment managers (Strategists), participants—and, if applicable, their advisors—are able to select from portfolios designed by professionals, instead of picking individual funds. The money manager is responsible for monitoring the performance and rebalancing or changing funds to help meet the performance objective.

Fees & Expenses

Direct fees vs. Indirect fees

When working with Aspire or other custodial brokerage firms 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 Aspire. 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. So your fees may differ from other participants depending on multiple factors.

Direct Fees:

Administration Custodial fee:  0.15% 
Aspire 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.

In most cases, up to $20 of the account fee is used to offset some or all the
TPA’s fees.

Other Applicable, Transparent Plan & Participant-Level Fees:

  • $100 loan initiation
  • $75 per distribution processing
  • $10 recurring distributions
  • $25 check replacement
  • Surrender fees: None

Indirect Fees:

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 0.05% to 2.09%.

Investment Expense
Reflected in the mutual funds selected.

Withdrawal Charges: 
Some share class mutual funds may have surrender charges. Please check each funds prospectus for more details.

Professional Money Management//Strategist Services
If you choose to use money managers, fees specific to the strategist are deducted from participant account balances.

Features & Benefits of Aspire Financial 403(b)

Plan Benefits:

  • Traditional and Roth for 403(b) and 457 are available
  • Loans available up to  50% of your account value  with a $50,000 maximum
  • Third-Party Money Manager services are available
  • Participants can enroll directly and invest at their own direction, or work with an advisor of their choice. (see more on Self-Directed or Advisor-Directed below)

Investment Benefits:

  • No proprietary fund requirements
  • A guaranteed interest option is available, without surrender charges or restrictions
  • Dollar cost averaging

Fee Benefits:

  • 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 Aspire’s website, including links with prospectus, annual reports, semi-annual reports, and SAI.

  • Within online accounts, participants have links to educational videos, FAQs, white papers, and several calculators from S&P and other sources.
  • Links to Morningstar® reports a leading fund analysis source
  • Rebalance investments based on new investment election percentages.
  • Required Minimum Distribution Services
  • Customer Service Support – Representatives are available Monday – Friday, 8:00 a.m. – 8:00 p.m.
  • Paper statements are mailed quarterly; however, statements can be accessed at any time and for custom time periods via this portal.

Self-Directed vs Advisor Directed Option:

Self-Directed Account Option

Many investors feel comfortable putting their investment decisions in their own hands. Self-directed brokerage accounts enable the participant to set up, pick funds and manage their account without an advisor. Being a self-directed investor has its advantages, as it allows you to take more control over your money.

More control begets two main benefits:

  1. Lower costs — investors who use to use self-directed option avoid any advisory fees that might be charged when working with a financial professional on Aspire’s platform. Also participants can choose from hundreds of no-load, lower-cost mutual funds choices that are available.
  2. Fewer conflicts — Hiring a financial advisor could invite conflict of interest. Many advisors are paid more to sell certain products that carry higher fees. Some less ethical advisors will steer you toward products where they get the largest commission when you invest in them. Self-directed investors eliminate many of the conflicts of interest that can work against them.

Advisor-Directed Account Option

If the participant chooses to work with an advisor, they should be aware of the various ways in which the adviser can be compensated. When working with an advisor or Registered Rep there are a few layers of fees that you will need to be aware of.

  1. Direct Fees: Aspire’s fees are still the same.  0.15% fee on assets & $40 a year.
  2. 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.
  3. Advisor / Sales Rep Compensation: Aspire 403(b) accounts can be set up and managed by Registered Reps or Investment Advisor Reps.  The way advisors are paid can lead to some big differences between the two and the services you receive from them.
    • Commission-based advisors: Advisors on Aspire’s platform that are paid by commission receive their compensation from their clients purchasing mutual funds with a “load”. A load fund is a mutual fund that comes with a sales charge or commission. The fund investor pays the load, which goes to compensate a sales intermediary, such as a broker, financial planner or investment advisor, for his time and expertise in selecting an appropriate fund for the investor. For a commission-based advisor, the more transactions they complete or the more accounts they open, the more they get paid.  Participants should familiarize themselves with the various Mutual Fund share classes that Aspire offers. Each share class differs in what type of load or compensation their advisors will receive up-front & in the future
    • Fee-based advisors: Fee-only 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, typically around 1% of a client’s portfolio’s value each year.

Advantages Of Aspire Financial 403(b)

  • Aspire has one of the most extensive open architecture platforms in the 403b marketplace.
  • Retirement investors can select their own mutual fund investment or work with the assistance of a Financial Advisor Representative.
  • Aspire has some industry leading technology that enables you the manage your retirement account through their web-based platform.
  • Very competitive fee structure vs other providers (0.15% custodial fee & $40 annual maintenance fee)
  • Whatever your investment philosophy,  passive index investing  to socially responsible investing  Aspire provides funds that could potentially fit your needs?

Disadvantages

  • Aspire’ customer service may be slower than some participants expectations and what they may be accustomed to with providers.
  • As an example, processing time for opening a new account is 7 – 10 business days.
  • Having to choose from mutual funds with multiple loads schedules can be confusing. Make sure you read each mutual fund’s prospectus that you plan on investing in in order to understand the load & fees of each fund
  • If you chose to “do it yourself” be aware that you will need to build knowledge regarding investing, spend time managing your own account & hopefully have the desire to do this on your own.

Conclusions on The Aspire Financial 403(B)

Let’s recap:

Aspire Financial is a company that offers one of the most diverse multi-fund family platforms in the 403b marketplace.

Aspire is one of the few companies that offers an open architecture mutual fund program which allows plan participants to manage their own accounts or to work with the advisor of their choosing, the investments of their choosing, and money managers or investment strategists of their choosing.

Selecting a 403b provider that only sells their proprietary products may not offer all the financial products a client needs or that are in a client’s best interests. Open architecture makes it possible for investors and their advisors to select the best funds available and obtain the best potential investment performance given their needs and risk tolerance. Open architecture also helps investors obtain better diversification and possibly reduce risk by not placing their entire future investment returns in the hands of a single investment firm and its approach.

Many companies offer school district employees their proprietary mutual fund products but if the participant is unhappy with any component (fee/performance) of the plan, it is forced to close their accounts and transfer to another vendor.

At Aspire you have access to 500 different families of mutual funds so there is a good chance that you can invest in  the same funds that is being offered at any of the other 403b companies and possibly at a lower cost.

Things to consider about this company’s platform:

Avoidable vs un-avoidable fees:

  • Aspire’ unavoidable fees are their custodial fees charged by Aspire are 0.15% of your account value. $40 annually
  • Other unavoidable fees are the investment fund fees, but these will vary depending on which funds are selected. Aspire gives you access to some of the lowest cost funds available in the industry, so do your homework.
  • If you choose to work with an advisor, then there is a good chance there will be an additional fee which is negotiable with would be negotiated between you and the advisor.  Aspire has no policy for determine what advisers charge for there services.
  • There are no Surrender Charges to leave Aspire’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 Aspire Financial 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.

THANK YOU

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. If you have a Facebook account, one of the best ways to spread this message around is by “sharing” the post by using the Facebook icon below (it’s a blue square with a white F on it).

Thanks again for reading, and as always, if you have any questions or would like to have your retirement portfolio reviewed, don’t hesitate to reach out and schedule your no-obligation consultation.


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.