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A New Way to Invest Locally

State

Photo: istockphoto.com

Does the Wall Street crisis have you feeling wary about the investment industry? If so, here’s something to think about: There is a new 401(k) plan in town that might be easier for investors to believe in.

The Hawaii Prosperity Plan is designed to be low-cost, with lower fees for investors, greater transparency and opportunities to invest in funds focused on sustainable business right here at home.

The plan is the result of a partnership between Kobo Wealth Conservancy & Family Office LLC, independent fiduciary firm Matthew D. Hutcheson LLC, Sustain Hawaii and Charles Schwab (as custodian).

In addition to the focus on local sustainable business, the plan emphasizes lower fees, which can mean more money saved for retirement, says Cris Borden, director of Kobo Wealth.

By focusing on low-cost index funds, the HPP can cut fees to under 1.7 percent, compared with a typical fee of around 3 percent on a conventional 401 (k) plan, Borden says. This is due to lower average expenses and lower transactional costs, he says.

The Hawaii Prosperity Plan is open to every business in Hawaii and even sole proprietors, Borden says.

One of the funds included in the plan’s investment portfolio is Kobo Wealth’s Mahalohana Fund, which invests in Hawaii companies that focus on local, sustainable growth industries such as alternative energy and agriculture. Kobo Wealth started the fund in September 2008.

While most 401(k) plans are managed by mutual fund or insurance companies, the Hawaii Prosperity Plan differs in that it has two fiduciaries in house: Matthew Hutcheson’s firm oversees the plan’s service providers, controls costs and handles IRS filings, and Kobo Wealth takes care of mutual fund selection and investment models. Such oversight mitigates the fiduciary responsibility of corporate executives and business owners invested in the plan, Borden says. That makes sense not just for businesses, but for investors, given that as fiduciaries, the firms of Hutcheson and Kobo Wealth formally sign off on the plan. “The plan is logical, easy to understand and benefits almost everyone,” he says.

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Hawaii Business,February