THE MOVEMENT to give people more control over their own money continues to advance -- and not just through our own innovative Customer Stock Ownership Plan (CSOP™) technology platform here at LOYAL3.  Dimensional Fund Advisors (DFA), founded by the index fund guru David G. Booth, has turned to its estimable board for its own innovation to democratize Wall Street.  Just a few days ago, DFA unveiled a breakthrough in the defined contribution plan space.  Board member Robert C. Merton, a Nobel laureate in economics and finance professor at Massachusetts Institute of Technology Sloan School of Management, and the company's resident scientist, announced the creation of personalized individual managed accounts that make employee investment decisions for them.  At first glance, this may not sound like progress since Wall Street already makes investment decisions that impact almost all of us -- and they have done a pretty poor job of it.  But the Managed DC (managed defined contribution) tool is individualized to meet the employee’s needs and goals  — and nags the employee if they aren't saving enough.

Mr. Merton said the plan addresses shortcomings in traditional defined contribution plans. It takes in numerous personal details about participants, from age, gender and marital status to how much they put away in 401(k) accounts and what they can expect to get from Social Security.  But it also takes an assertive role in ensuring participants to think about how much money they will need when they retire. The firm crunches all that information to determine a retirement-income target and make the appropriate investment allocations. When participants log in to their account, they see their income target and get a report card on whether they are saving enough.

LOYAL3 and its CSOP democratizes Wall Street by allowing customers to “own what they love” without paying the broker fees that eat away at their investments even when they are “buy and hold” investors.  We are investor-focused and driven to empower the 80% of American families who currently own no stock (Federal Reserve).  It’s heartening to read about other companies that are starting to pay attention to the forgotten American middle class and are thinking about helping everyone attain financial stability and not just line the pockets of the big investment firms.  We think we’re really on to something here at LOYAL3, and we’ll keep a lookout for like-minded companies to tell you about.