ETFxChange for Retirement Plans

ETFxChange is a platform developed by Mid Atlantic Financial Platforms, Inc. for Mid Atlantic Trust Company so that retirement plans have easy access to ETFs along side mutual funds. Because most defined contribution processes and systems have been designed around processing mutual funds, using ETFs in retirement plans has been either too expensive, or too operationally burdensome. The Mid Atlantic ETFxChange solution lifts these barriers and allows retirement plans to invest in ETFs using the processes and systems already in place for mutual funds.

Mid Atlantic Financial Platforms, Inc. is proud to be a Preferred Network of iShares ETFs where alongside mutual funds is access to all 175 + iShares ETFs. Visit www.ishares401k.com to learn more about the value of ETFs in a 401(k) plan.

Frequently Asked Questions by the Financial Consultant

Which ETFs can I use?

All 175+ iShares ETFs are available on the ETFxChange platform as well as over 600 other ETFs available upon request. You can access the universe of ETFs through Mid Atlantic Trust Company's unique research tool found at www.stnfunds.macg.com. If you don't have access to this section of the web site, please contact your record keeper to be able to use this feature. Here you will be able to narrow down your ETF and mutual fund selection by filtering your search using over 600 data points to come up with the right investment mix.

Why would I use ETFs instead of mutual funds?
As the trade platform, custodian and/or directed trustee, we do not offer investment advice. We are here to make sure your clients can efficiently use the investments on which you advise. Before investing, you and your clients should be sure to understand the differences and the risks of ETFs.

Why ETFxChange instead of a collective or unitized fund?
Collective and unitized funds are created using the underlying ETF as well as a cash vehicle to provide daily liquidity and reduce the cost of trading. Administrative and audit fees are then charged against the fund, while commissions and trading fees are netted out of trades. The combination of liquidity drag, expenses, and trading fees can cause the fund performance to substantially deviate from the actual performance of the ETF. ETFxChange gives you the same benefits of ready liquidity and reduced costs without the performance lag. This allows you and the participants to use the same public information and tools to select and track ETFs without any performance surprises.

Why are fractional share positions important?
The inability of custodians to hold fractional shares and trade on a dollar certain basis has been the primary hurdle for record keepers to effectively support ETFs in retirement plans. Fractional share positions and dollar based trading are standard for mutual funds, and the systems used by record keepers are built around that model. Until ETFxChange, record keepers needed to create new manual processes or adopt entirely new systems to support ETFs. ETFxChange is the first platform that allows record keepers to operate ETFs using the same systems and processes already in place for mutual funds.

At what price are ETF orders executed?
All ETF orders are filled based on the end of day prices of their primary exchanges on the trade date sent to us by the record keepers. Mid Atlantic will accept trades until 2:30am, or earlier if required by the market or the record keeper, as long as the investment decision was made before the market close. Also, there are no commissions or fees netted from the trades, so all transactions are settled at simply price x shares (or dollars / by price for dollar certain orders).This settlement process is identical to that of a no-load mutual fund.

Can I use ETFs along with mutual funds in the same plan? What about ETFs in model portfolios?
Absolutely. ETFxChange was developed specifically to be used in conjunction with mutual funds. Your record keeper’s mutual fund processing and administration methods will determine how you can use ETFs. If your record keeper allows you to create participant model portfolios, you can create models that use all ETFs, or, even models containing a mix of ETFs and mutual funds.

Is there any compensation paid from the funds?
ETFs do not pay 12b-1 fees, finder’s fees, sub transfer agency fees or shareholder servicing fees. Mid Atlantic receives no direct or indirect compensation from the ETF providers.

What are the fees for the ETFxChange?
From the plan sponsor’s perspective, the only costs are the expense ratio of the ETF plus the fees charged by the record keeper. Mid Atlantic covers all commissions, SEC fees, and other trading and brokerage costs. We do charge the record keeper a competitive asset based fee for access to the ETFxChange platform, which is passed onto either the plan sponsor or the participants. Check with your record keeper for more specifics on access fees charged by Mid Atlantic.

ETFxChange is provided by Mid Atlantic Financial Platforms and is not offered by BlackRock Institutional Trust Company, N.A. ("BTC") or its affiliates. Since every client's circumstances and requirements are different, you should do your own due diligence and make your own assessment.

iShares is a registered mark of BlackRock Institutional Trust Company, N.A. ("BTC"). BTC has licensed certain trademarks and trade names of BlackRock to Mid Atlantic Financial Platforms.  ETFxChange is not sponsored, endorsed, sold, or promoted by BTC or any of its affiliates (collectively "BlackRock"). BlackRock makes no representations or warranties to the owners of ETFxChange or any member of the public regarding the advisability of investing in ETFxChange. BlackRock has no obligation or liability in connection with the operation, marketing, trading or sale of ETFxChange.

Mid Atlantic Trust Company is independently owned and operated. Mid Atlantic Financial Platforms, Inc., which was recently merged into Mid Atlantic Capital Group, Inc. maintains an operating agreement with Counsel Trust Company, dba Mid Atlantic Trust Company to perform its institutional retirement plan reporting and administration.