

Show HN: Simplifying 401(k) Advice - Feedback? - car
http://www.kivalia.com

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nobodysfool
Just want to say that if it's free, why do I even need an account to see for
example this:

[http://www.kivalia.com/plans/moderate-
portfolio/226/oracle-c...](http://www.kivalia.com/plans/moderate-
portfolio/226/oracle-corporation-401k-savings-and-investment-plan)

All I have to do is right click and 'delete node' in Chrome, and I get to see
everything without an account.

Also, I could just go to the javascript console and run this: $.unblockUI();

If you are going to block people, at least do it right.

~~~
bpm11
We're not shooting for bulletproof security, at this time, as there is no
personal info here. If we were, we'd probably be hiding the model portfolios
behind the firewall as well.

That said, we would like those who find the information of value to sign up so
we can update them as the models change.

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bpm11
Hi all,

"Edit: I'm the co-founder of Kivalia." We've spent about 1 1/2 years
developing the above-linked community-based 401(k) advisory service offering,
which is now live. We'd welcome feedback from the community to help us refine
the design/flow/usability of the service offering.

The specific problem we're solving is "How should I invest my 401(k) money,
given the market environment and the options available to me specifically?"

My partner and I have deep domain expertise (quant finance & investment
advisory experience - 25 years or so between us) and as such, run the risk of
creating something intuitive to us, but too geeky for mass consumption.

I’ll be active in the comments section

Thanks! B

~~~
wj
As your competitor I wish you the best! More innovation in this space is
needed.

~~~
bpm11
Agree completely wj! Feel free to chat w/me if and when you'd like.

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bradleyjg
I like the general idea -- many company's 401k options range from slightly
sub-optimal to terrible, and helping people make the best of whatever choices
they face can be very useful.

On the UI/UX side, the look and feel is very slick, but I'd like to see some
deeper tutorial type explanations for things like beta and risk profiles
rather than short "help" style definitions.

More fundamentally, it is hard to garner a real understanding of the sites'
investment philosophy. That's something I'd really want to know before I send
a friend or relative to this sort of website.

For example, although it is clear that the site favors active portfolio
management, beyond just re-balancing, what is its take on active versus
passively managed underlying funds? Is past performance being used as a
predictor of future performance? What is the weight given to fees? What about
internal leverage? And so on.

~~~
the_watcher
Yea, my biggest problem with my employer 401k is that I can't just invest in a
Vanguard low fee fund, but I have to use their 401k management to get my
matching funds.

~~~
arielweisberg
I once had an employer who gave away .5% of my 401k every year to a no value
add consultant who selected the overpriced funds. I lost 1% every year I
didn't roll into an IRA, but it beat having the principal taxed @ 25%.

I wonder where the inflection point is where you are better off investing
after tax.

~~~
joe_bleau
Annoying, isn't it? Every time Frontline or one of the major networks runs a
scare story about how much money people are losing due to high fee 401k plans,
I get angry. Not so much at the lost money, but that the 'in-depth journalism'
never seems to bother with any suggestions on what to do if you're in one of
those crummy plans. (To be fair, I guess "quit and go to work for Google or
Goldman" wouldn't go over well, either...)

~~~
saryant
[http://www.bogleheads.org/wiki/How_to_campaign_for_a_better_...](http://www.bogleheads.org/wiki/How_to_campaign_for_a_better_401\(k\)_plan)

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anandabits
Employer provided 401k plans are great when you receive matching
contributions, but otherwise not a very good. They generally have extremely
limited investment options. It will be hard to offer general advice applicable
to all 401k participants since they will each have a small selection of
investment vehicles.

The best advice is to make sure you contribute enough to receive the matching
contribution, and then immediately roll the money out into an IRA as soon as
you leave the employer. This will allow you access to a much wider range of
investment vehicles.

~~~
wj
More and more firms are starting to offer self directed brokerage accounts
that you can use within your 401(k) plan.

Also in a 401(k) plan you get to purchase mutual funds at NAV which you cannot
do through an IRA.

I don't believe there is a one size fits all ("best advice") solution to
personal finances. Though I do agree with making sure you max the matching.

~~~
saryant
> Also in a 401(k) plan you get to purchase mutual funds at NAV which you
> cannot do through an IRA.

I don't believe that's correct. My understanding is that all mutual funds
(excl. closed-end funds) must trade at NAV regardless of the type of account
they're held in.

[http://www.sec.gov/answers/nav.htm](http://www.sec.gov/answers/nav.htm)

~~~
wj
From your link:

"That is, the price that investors pay to purchase mutual fund and most UIT
shares is the approximate per share NAV, plus any fees that the fund imposes
at purchase (such as sales loads or purchase fees). The price that investors
receive on redemptions is the approximate per share NAV at redemption, minus
any fees that the fund deducts at that time (such as deferred sales loads or
redemption fees)."

In 401(k) the loads or purchase/redemption fees are usually waived (with the
exception of short term redemption fees which are sometimes imposed for not
holding funds at least 30-90 days to discourage people trying to "day trade"
mutual funds).

Also, I did forget to mention that, in addition to waiving CDSC charges, large
plans can usually qualify for cheaper share classes of the funds. For example
Admiral or Signal shares at Vanguard rather than the retail Investor shares.

~~~
saryant
Right, there can be fees imposed on top of the fund's price itself but that
doesn't mean the fund isn't trading at NAV.

~~~
wj
Well, I said "purchase" rather than "trading". And you can't purchase at the
NAV price if they're adding fees on top of it.

~~~
AjithAntony
There are a great many no-load funds. A cost-sensitive investor will naturally
buy index funds, and all the major IRA custodians offer at minimum, their in-
house index funds fee free.

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trombs
Brilliant concept, as I've been struggling with this exact problem for a
while. A few comments:

Details on how you decide a fund rating would be nice.

The "Forecasts that drive our models" doesn't tell me what's really going on.
First item: "US Small Cap vs Large". So you're biased toward small cap? That's
the implication, but it's not explicit. I'd like to read why. Also, two of the
three listed items talk about international (without any explanation), yet my
specific plan recommendation has just a sliver of international exposure
despite several options in that regard.

Usability: after finding my company's plan and creating an account, if I click
on "401k guidance" in the top nav, I don't expect it to show the search field
to find other company plans. Rather, I expect it to show me my plan(s). (I see
it's under My Stuff, but that's less obvious.)

Very good start!

~~~
bpm11
Currently fund ratings are determined as risk adjusted excess return versus
the fund's best fit index. A "C" is average (no curve here!), so you'll find
most index funds will be rated C. Funds that have returned more than 3% more
on an RAR basis over the past year are deemed A.

We'll want to revisit ratings as we build out - to look at the graphic
representation of excess returns in a universe and then customize ratings
around reasonable percentiles.

On the +/++ and -/\-- portions of the ranking: these are simply momentum
scores for the sector in which the fund participates. So, an A++ fund is a
manager who is doing well on a risk adjusted basis, in a sector that has
strong current momentum.

We'll need to be more explicit on the biases. You're right they don't tell me
much. The biases are clearly based on the forecast 10 year returns. At present
we are negatively disposed to international generally. You can actually read
through our views on the blog:
[http://www.kivalia.com/blog/post/2013/07/11/Investment-
Outlo...](http://www.kivalia.com/blog/post/2013/07/11/Investment-
Outlook-Q3-2013)

See if that helps.

Will take usability thoughts into account as well. Thanks!

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elindell
Small thing I noticed. On [http://www.kivalia.com/retirement-
plans](http://www.kivalia.com/retirement-plans), typing in something you
Kivalia doesn't recognize (most easily reproduced with something like
"eafeaea") occasionally results in a JS alert that says "error".

~~~
bpm11
thanks for pointing that out, elindell...I've noticed that every once in
awhile as well and we'll stamp that out.

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PaulHoule
Who stays in one place enough to have "one" 401(k)? When I switch jobs I roll
over. I have rollover, traditional, Roth and SEP IRAs at E-Trade Does your
service work for me?

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bpm11
Then you might benefit from the advice we provide that takes advantage of the
"no commission" ETF lists at the leading brokers (Fidelity, Schwab, E*Trade,
TD Ameritrade) to start.

[http://www.kivalia.com/blog/](http://www.kivalia.com/blog/)

Our advice is applicable in a number of ways.

~~~
PaulHoule
How do you wind up with a 29% allocation to CYB in a "conservative"
allocation?

~~~
bpm11
Interesting catch, Paul. If you look at the plan itself (E*Trade Commission-
Free ETFs) there aren't a lot of fixed income options available in the list
and all of them seem to be international. So, the first point here is that
it's tough to get a truly low-risk, low correlation instrument within this
list.

The chinese yuan is an edge case (ie. we don't classify it well because it's
currently outside the granularity of our framework - that will change), but if
you think about it, probably not a bad choice. The yuan is pegged to the U.S.
dollar and has a return (unlike US money market).

So simply, yuan is being used as a U.S. fixed income proxy in this case. The
benchmark for the conservative models is about 40% bonds, 60% stocks.

Tell you what you can do - subscribe to the model and add a U.S. treasury ETF
(eg. TLT) to the list...then re-run the models. My hunch is you'll find it
heavily weighted in the models.

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barjo
Like how you can get the performance rolled back in time. Nice feature that I
have never seen before. Makes it feel less of a leap of faith.

~~~
bpm11
that another cool thing about the Kivalia framework. We have time-stapped
market views, so we can confidently go back and say "Here's what we would have
recommended for your plan 9 months ago".

I think you're obligated to do something like this if you're in any way
providing active advice.

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dman
How does this differ from brightscope?

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bpm11
From my knowledge Brightscope rates the plans themselves based on expenses and
other criteria.

Kivalia provides plan participants ongoing, actionable advice on how to invest
the funds held in their individual accounts.

