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"Who is Flexible Plan Investments, Ltd.?"

Flexible Plan Investments is a national investment advisory service that specializes in applying risk management techniques to investors’ mutual fund and variable annuity portfolios. Founded in 1981 by Jerry Wagner, the firm is based in Bloomfield Hills, Michigan. Our team of professionals and service staff are dedicated to providing the highest level of service in the industry.

“What is Flexible Plan’s record of performance?”

Flexible Plan is widely considered a leader in the management of investment risk and returns. We avoided 1987’s Black Monday by taking clients 100% out of the stock market and into the safety of money markets on August 31, 1987 — just 60 points off the then all-time DJIA high of 2723. Flexible Plan also avoided the stock market’s “Friday the 13th” plunge in 1989 and the substantial market sell-offs in 1990, 1998 and 1999, yet participated in the bull markets of the 1990s. Furthermore, many clients using Flexible Plan’s approach to strategic diversification reduced the impact of investment losses as experienced by various market indexes. Flexible Plan’s success has been highlighted in such magazines as Business Week, Barron’s and Mutual Funds Magazine, and was, in the 1990s, repeatedly listed among Inc. Magazine’s 500 Fastest-Growing Private Companies.

“What is Evolution Asset Allocation?”

Evolution combines the best features of asset allocation and active management. Evolution endeavors to keep clients invested in the top performing funds within a pre-selected portfolio of investments as diverse as stocks, bonds, precious metals, internationals and industrial sectors. Reallocation is reviewed weekly. Since money market funds are also ranked in the system, the approach offers the possibility of moving to a 100% cash position during periods of slow growth or market decline. Evolution reviews client accounts on a weekly basis, and makes adjustments when appropriate.

“Is Evolution a strategy or a process?”

It’s both! Evolution was originally developed as a general dynamic asset allocation strategy to pick funds from a diverse universe of asset classes. It performed so well we began applying the Evolution process (picking the top performing funds) to targeted universes. Currently, we apply the Evolution selection technique to global equities, global bonds, domestic bonds, high tech funds, defensive funds, sector funds...even other strategies. Investors are encouraged to use a number of these strategies, together with tactical asset allocation strategies, for maximum risk avoidance.

“What is Lifetime Evolution?”

Flexible Plan now offers multiple risk profiles for Evolution clients with its Lifetime Evolution service. Simply complete our suitability questionnaire to be placed in one of twelve risk profiles. Your account will be managed based on your indicated risk tolerance and investment time horizon. Separate equity and income portfolios (at least three of each) will be maintained for each account. The less risk tolerant your suitability score, the more of the income portfolio you will own. All of the portfolios are managed in accordance with our Evolution methodology.

“Does Flexible Plan work with 401(k) and 403(b) accounts?”

Flexible Plan is one of the first advisers in the nation to offer employers Nationwide’s Managed Account Program for participant-directed 401(k)s. Available both for Nationwide Insurance Retirement Plans and plans offered through other independent TPAs, the program, known as The Flex Plan, makes use of our Evolution technology to deliver twelve individualized investment profiles to plan participants. Each profile has a different allocation to an income and an equity fund portfolio ranging from 100% income and 0% equity, to 100% equity and 0% income. The Evolution process is used to manage each portfolio. Participants are placed into one of the twelve profiles based upon their answers to a suitability questionnaire. The Flex Plan is also available to participants in Fidelity 403(b) plans.

“What is Strategic Solutions?”

Utilizing trust companies to custody its accounts, Flexible Plan created a wrap fee program that takes advantage of access to over 1,000 mutual funds. These funds can be traded with no transaction fees or commissions*. Such a wide selection of funds allows us to offer over 30 distinct management strategies, designed to satisfy each client’s individual risk tolerance. Since multiple strategies further enhance the risk-adjusted return of any one strategy, strategic diversification is encouraged!

*Other fees may apply.

“How do I really achieve strategic diversification?”

Strategic diversification requires a portfolio of numerous, uncorrelated strategies. “Uncorrelated” means the strategies must behave differently. Strategic diversification cannot be achieved by only investing in the strategies that were last year’s or last quarter’s winners. Nor can it be accomplished by simply picking and choosing from the list of Evolution (momentum) strategies, or just from tactical asset allocation strategies, for that matter. It’s important to create a portfolio that either

(1) holds a large number of strategies (seven or eight, for example),

(2) holds different types (global, domestic, bonds, equity) and different styles (momentum and tactical), or

(3) if you have limited assets, uses a broadly diversified strategy — Value Added Conservative, Lifetime Evolution or Evolution II.

“What are my tactical asset allocation choices?”

Flexible Plan believes in the benefits of tactical asset allocation. Studies have consistently shown the risk reducing advantages of these strategies. However, there is no Holy Grail or silver bullet that always works in all markets. Therefore, Flexible Plan makes available multiple tactical asset allocation strategies. Clients are encouraged to build a portfolio of different strategies (including Evolution-type strategies) for maximum risk avoidance. Among the tactical asset allocation strategies available to Flexible Plan clients are Classic, Systematic Advantage, Strategic Allocation and Political Seasonality.

“What kind of reporting do clients receive?”

Clients continue to receive their monthly or quarterly account balances and year-end tax statements directly from their mutual fund, annuity, brokerage firm, bank or trust company. In addition, Flexible Plan publishes a quarterly newsletter, quarterly performance statements, year-end capital gains summaries for taxable accounts, and a weekly market hotline report. Strategic Solutions, variable annuity and mutual fund clients can receive daily valuations and positions on the Client Services section of our website.

"Where is the Market Hotline?"

The Market Hotline and Classic Update can be accessed through the "What's New" page within the Advisor Services area of the website, or from the "Weekly Updates" button on the left navigation bar within the Client Services area of the website.

“How are fees charged?”

The range of published advisory fees charged by Flexible Plan is between 1% and 2.6%. Flexible Plan does not charge its advisory fees in advance; rather, all advisory fees are charged in arrears, at the end of each quarter. An Establishment Fee of up to 1.2% is chargeable in advance on deposits into Strategic Solutions accounts. Except as noted below, all of a client’s various accounts (including immediate family and controlled corporations and related qualified plans) may be aggregated for fee purposes, so that clients are charged the lowest possible overall rate for the services chosen. However, accounts participating in Flexible Plan’s “Flexible Fee Schedule,” available on a limited basis, are not eligible for aggregation.

“Is there a minimum investment?”

Other than in The Flex Plan retirement program where no minimum account size is required, we accept accounts as low as $20,000. Please contact Flexible Plan if you have any questions.

“How liquid is the investment?”

Mutual funds are among the most liquid investments in America today. Funds remain registered solely in the client’s name and withdrawals can be sent to the client by same-day wire transfers, mail, or, if the check-writing privilege has been elected, simply by writing a check. A call to Flexible Plan Client Services will insure that sufficient assets are available. Flexible Plan ceases managing an account upon receipt of written notification of termination. Fees on withdrawals and additions are prorated daily.

“Why use mutual funds?”

Mutual funds provide diversification, expert daily management, liquidity and telephone exchange privileges. Unfortunately, however, mutual funds are generally designed to stay fully invested in stocks or bonds, without regard to the direction of the market. This often results in exposure to large reductions in the value of investor portfolios and long periods of recovery to break even. Tactical or Dynamic Asset Allocation can improve this performance significantly.

“Who selects the mutual fund or variable annuity family?”

For accounts to be held directly at the mutual fund, variable annuity or variable universal life company, Flexible Plan can usually work with existing investments owned by a client; or those selected by the client through his financial planner or broker; or Flexible Plan can suggest various fund, variable annuity or variable universal life products from which to choose. Once a client opens an account and chooses the desired strategies, Flexible Plan makes all the fund decisions and executes all the trades using a limited power of attorney. For Strategic Solutions accounts, “A” and “C” shares, as well as personal checks or wire transfers, may be used to open and add to these accounts. The latter is preferred for ease and speed of transfer.

“How does Flexible Plan decide when to switch funds?”

Flexible Plan uses a number of economic and market indicators to reduce the client’s risk of exposure to significant market fluctuations. Classic uses top-down macro indicators to assess the need to increase or decrease stock fund exposure. Individual fund selection is based on short-term price momentum. Evolution is a bottom-up micro strategy that compares the individual price momentum of each of the funds in the portfolio. There is no top-down asset choice. Price performance alone selects the funds and thus the asset class as well. Strategic Solutions, variable annuity and mutual fund strategies can make use of either or both of these approaches, along with other tactical asset allocation strategies, to produce a customized portfolio of risk management strategies.

“What should my objectives be?”

Finding an investment adviser who will work to protect their clients’ interests in both up and down markets should be the goal of any serious investor. Flexible Plan is dedicated to serving that investor by utilizing its proprietary investment analysis to follow a conservative money management discipline using the nation’s leading investment vehicles, while providing constant reporting to its clients.

PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
Inherent in any investment is the potential for loss as well as the potential for gain. A list of all recommendations made within the immediately preceding year is available upon written request.

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