Vanguard can help optimize
your practice’s retirement plan
with a full range of expert services
For expert plan consulting,
flexible investments, and
ongoing support for your
fiduciary role, you can rely
on Vanguard
Vanguard offers:
•
Decades of experience in managing plans for hundreds
of medical firms.
•
A full range of investment options, including brokerage.
•
Sound investment management built on time-tested principles.
•
Skilled support for meeting your fiduciary responsibilities.
•
Custom plan consulting and the most current information
on regulatory changes.
•
Personal financial planning and advice services for assets inside
and outside the plan.
•
High-quality, flexible administrative services.
1
Our broad resources and decades
of experience can free you from the
burdens of plan management
If you’re looking for expertise in managing
retirement plans so you can focus on taking
care of your patients, Vanguard can help—
because managing retirement plans is
something we do extremely well. Since our
beginning in 1975, we’ve grown into one of
the world’s largest investment management
companies, with 18 million shareholders
and more than $800 billion in assets under
management (as of June 2005). About half
of those assets are held in retirement plans
and other institutional investments.
When you partner with Vanguard, you get
the best of both worlds—access to the
breadth and depth of our large-company
resources coupled with our extensive
experience in managing retirement plans
of your size and scope, including hundreds
of medical practices like yours.
2
You and your participants are well
served by our corporate structure
Most investment firms are either publicly
traded or privately owned. Vanguard is
different: We’re client-owned. Helping our
investors—your participants—achieve their
goals is literally our sole reason for existence.
This structure is a tremendous benefit, not
just to your participants, but to plan sponsors
like you in your role as a plan fiduciary. With
no other parties to answer to and therefore
no conflicting loyalties, we make every
decision—like keeping investment costs as
low as possible—with only the needs of our
investors in mind.
“We chose Vanguard as our 401(k) plan
provider for their unbeatable combination
of low cost, excellent performance, and
quality service.”
–Dr. John Healey, Radiology Associates of Tarrant County, Fort Worth, Texas
Our skilled analysts provide expert
plan design and ongoing support for
your fiduciary role
When it comes to plan design and support,
Vanguard offers a full range of services. Our
in-house team of investment experts can work
with you to develop a framework for your plan
that fulfills your fiduciary responsibilities and
meets the retirement savings needs of your
staff. Our analysts also can help you develop
an investment policy statement, and can
regularly evaluate your plan to ensure that
its overall investment approach remains
aligned with its objectives.
Our experts in retirement plan law also can
assist you with important concerns, such as
maximizing plan deferrals for key employees
or reducing administrative costs. In fact, our
plan consultants recently helped a medical
firm redesign its plan to save thousands
of dollars in plan costs and maximize benefits
for the firm’s physicians.
You get the investment flexibility
you’re looking for
As one of the world’s leading investment
management firms, we offer your retirement
plan a high level of investment flexibility that
includes not just Vanguard® indexed and
actively managed mutual funds, but a full
range of other fund families and access to the
entire universe of stocks and bonds through a
brokerage option.
For your less experienced participants, we
also provide easy-to-use Target Retirement
Funds. Each of these funds contains a
balanced mix of stock and bond funds and
is automatically managed to become more
conservative as a participant’s retirement
date approaches.
This wide range of investments means
you can create a flexible lineup for your
plan that meets the needs of all your staff
members, whether they are novice or
sophisticated investors.*
In addition, our highly skilled team of plan
consultants is at your disposal, including
attorneys and experienced specialists in
finance and compliance. Whether you need
assistance with document reviews or have a
concern about compliance, we can help you
address the issue properly.
* All investments are subject to risk
3
First in client satisfaction and relationship quality
For six consecutive years, Vanguard has been voted
first in overall client satisfaction in an independent
study conducted by Boston Research Group.
–Boston Research Group Defined Contribution Plan Sponsor Study, 2000–2005
Vanguard consistently strives to keep
investment costs low because we know
low management fees and transaction costs
can provide investors with a head start in
achieving competitive returns. Overall, the
average expense ratio of Vanguard® funds
is far below the average mutual fund expense
ratio.* These lower costs mean you and your
staff receive a higher percentage of your
Vanguard funds’ returns, which can translate
into significant savings over time.
*Lipper Inc., as of 12/31/04
> Lower investment costs mean you
keep more of your funds’ returns
$1.8 million
$1,483,503
Low expense ratio
$314,023 Difference
$1,169,480
High expense ratio
Portfolio value
Our low-cost investments help you
keep more of what you earn
A
B
0
10
20
Years
30
40
Low costs can have a dramatic impact on retirement savings.
This chart shows the result of 40 years of compounding
on two investments with different expense ratios. Fund A
carries an expense ratio of 0.30%. Fund B charges 1.40%.
After 40 years of compounding, the lower-cost option delivers
$314,023 more than the higher-cost option.*
*Assumptions: A 25-year-old participant has a starting salary of
$30,000, receives a 5% raise annually, and puts 10% of that
salary into a 401(k) plan each year with average annual returns
of 8% before costs. The example does not take into account
any taxes at distribution. This hypothetical example does not
represent the return on any particular investment.
4
Vanguard also ranked first in overall client relationship
quality for eight consecutive years in a study conducted
by Greenwich Associates.
–Greenwich Associates 401(k) Plan Study, 1997–2004
> Percentage of Vanguard active funds
topping their Lipper averages
100%
81%
85%
88%
91%
> Expense ratios: Vanguard versus industry
1.5%
1.35%
Mutual Fund Industry
1.2%
0.9%
0.6%
The Vanguard Group
1 Year
3 Years
5 Years
10 Years
0.23%
0.3%
Periods ended June 30, 2005.
Source: Lipper Inc.
The comparisons for the one-, three-, five-, and ten-year
performance as of June 30, 2005, included 12,245; 10,006;
7,641; and 3,118 funds in Lipper Inc. stock, taxable and
municipal bond, balanced, and money market categories.
Comparison does not include index funds. Results may vary for
other time periods. Only funds with a minimum one-, three-, five-,
or ten-year history respectively were included in the comparison.
0.0%
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Note that the competitive performance data shown
represent past performance, which is not a guarantee of
future results, and that all investments are subject to risk.
While costs for just about everything are skyrocketing, the
cost of investing in Vanguard mutual funds has fallen 39%
since 1990.
Sources: The Vanguard Group and Lipper Inc.
5
Personal financial planning and
advice help you manage your entire
financial picture
As your assets grow, you and your staff can
rely on Vanguard’s personal financial planning
and advice services to help manage all your
financial resources, both inside and outside
the plan. Select from our wide array of
services, from comprehensive one-time
financial planning to lifelong advisory and
trust services, all customized to your individual
needs. Whichever services you prefer to use,
you can be confident that they are backed
by our reputation for consistency, objectivity,
and integrity—a reputation that is second
to none in the financial services industry.
As a Vanguard investor with a more complex
portfolio, you can choose from services
that include:
Flagship™ Service: When you invest more than
$1 million with Vanguard, you'll be assigned a
specially trained, highly experienced Vanguard
representative who is familiar with your financial
situation, can help you address a wide range of
investment issues, and takes responsibility for
your satisfaction with Vanguard.
6
Voyager Service®: With an investment of
$250,000 to $1 million with Vanguard, you'll
have access to a special team of Vanguard
associates who can offer you guidance on
managing your portfolio, help identify your
investment and financial needs, and provide
solutions through Vanguard's array of products
and services.
Asset Management Services: If you’re ready
for ongoing, personal investment management
and trust services, entrust your assets of
$500,000 or more to Vanguard Asset
Management Services.
Personal Financial Planning: Get personalized
and practical advice by consulting with a
Vanguard financial planning professional, who
can help you with issues such as selecting
investments, saving for future education
expenses, or developing an estate plan.
“We really felt like part of the ownership model
Vanguard talks about. Most companies lower
prices only if they are at risk of losing a client or
to stay competitive. But with Vanguard, the cost
of investing is really based on cost, not profit.”
–Jay Burghart, CFO, The Doctor’s Clinic, Seattle, Washington
Effective education and advice
programs aim to improve
participants’ savings
We can take on the administrative
tasks and reduce your plan-related
workload
To be financially prepared for retirement, your
participants need to learn how to make sound
investment decisions that can help them build
assets in the plan. To meet this need, Vanguard
can deliver effective investment education
programs—in print, online, on video, or in
person—all communicated in the clear, candid
“plain talk” style that is one of our hallmarks.
Our education programs and tools are based
on our proprietary research in behavioral
finance and are proven through our decades
of experience in managing retirement plans.
Your focus should be on caring for your
patients, as well as building and maintaining
your practice, not administering your plan. Our
broad experience in administering retirement
plans—including plans for hundreds of medical
firms like yours—can help. We can take the
burden of administration off your shoulders,
reducing the amount of time you need to
spend on plan issues.
In addition to ongoing investment education,
we also offer a variety of personal financial
planning options for your participants, ranging
from comprehensive, do-it-yourself, online
portfolio management through Financial Engines
to simple, diversified Target Retirement Funds
that automatically become more conservative
over time.
7
98% of Vanguard clients
Rate Vanguard’s overall quality as excellent, very
good, or good.
• Are likely to continue using Vanguard.
• Are likely to recommend Vanguard to a colleague.
•
–Vanguard 2005 Client Loyalty Study
Your Vanguard team collaborates with
you to create efficiencies and value
You and your participants can contact
Vanguard through multiple channels
We strive for lifelong relationships with all our
clients and are committed to excellence in
everything we do. We think you’ll appreciate
the dedication of our people, who will quickly
become your most valued resource.
When you and your participants have investment and retirement questions, Vanguard
provides several different ways to get answers.
You can log on to Vanguard.com®, one of the
most comprehensive websites in the industry,
to manage your account, learn about investing,
and research funds. Participants can also call
our automated telephone account service 24
hours a day, or speak directly to a licensed
associate during business hours.
Your single point of contact is your relationship
manager, who serves as your partner, listening
to your needs, brainstorming strategic solutions,
and bringing in other Vanguard experts as needed.
Plan C
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As a plan sponsor, you also have access to the
Vanguard Plan Sponsor Bridge®, where you can
log on directly to current plan-level data and
activity, as well as participant-level information.
The Bridge also helps you stay up-to-date on
the latest developments at Vanguard and in the
financial industry at large.
Vanguard Institutional
Investor Group
P.O. Box 2900
Valley Forge, PA 19482-2900
Connect with Vanguard™ > www.vanguard.com > 800-523-1036
For more information, visit www.vanguard.com,
or call 800-523-1036 for Vanguard funds and
800-992-8327 for non-Vanguard funds offered
through Vanguard Brokerage Services®, to obtain
a prospectus. Investment objectives, risks,
charges, expenses, and other important
information are contained in the prospectus;
read and consider it carefully before investing.
Vanguard, Flagship, Voyager Service, Vanguard.com, Plan Sponsor
Bridge, Vanguard Brokerage Services, Connect with Vanguard, and
the ship logo are trademarks of The Vanguard Group, Inc.
Vanguard Personal Financial Planning Service is provided by
Vanguard Advisers, Inc., a registered investment adviser. Vanguard
Asset Management Services are provided by Vanguard National
Trust Company, which is a federally chartered trust company
operated under the supervision of the Office of the Comptroller
of the Currency.
Financial Engines is a trademark of Financial Engines, Inc.
Financial Engines Advisors LLC, a federally registered investment
advisor and wholly owned subsidiary of Financial Engines, Inc.,
provides all advisory services.
All other marks are the exclusive property of their
respective owners.
© 2005 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing Corporation, Distributor.
MPBRO 092005