Retirement Plan.

Investment Company Introduces Non-ESG, Shareholder-Focused 401(k) Retirement Plan

An Ohio-based asset management company, Strive Asset Management, has unveiled a new 401(k) retirement plan aimed at medium and small businesses, emphasizing shareholder value maximization over environmental, social, and governance (ESG) investing priorities. The CEO, Matt Cole, criticized the ESG approach employed by larger investment firms and believes that prioritizing shareholder capitalism has contributed to more innovation and higher returns in the United States compared to Europe.

1. Focus on Shareholder Value Maximization:

   • Strive Asset Management’s new 401(k) plan places a strong emphasis on maximizing shareholder value. The CEO, Matt Cole, argues that the ESG approach deprioritizes shareholders in favor of other stakeholders, constituting a fiduciary breach, and rejects this approach.

2. Customized Retirement Plans:

   • The plan allows employers to tailor a 401(k) plan to their company’s specific needs while aligning with Strive’s investment philosophy. It seeks to provide flexibility for businesses to offer retirement plans that prioritize shareholder value.

3. Direct Indexing Service:

   • In addition to the new 401(k) plan, Strive Asset Management has announced a Direct Indexing service for investors seeking portfolio customization and tax efficiency. This service allows investors to have more control over their portfolios.

4. Challenging ESG Values:

   • Matt Cole challenges the idea of accepting lower returns in exchange for pushing values in corporate America, particularly those related to racial equity audits, affirmative action, and forced emissions reductions. He argues that such values can be misaligned with the average investor’s priorities and result in lower returns.

5. Stakeholder Capitalism Rejection:

   • The CEO firmly rejects the concept of stakeholder capitalism, asserting that it implies serving multiple masters. He advocates for companies to focus on providing customers with great products and services while maximizing value for shareholders.

6. Retirement Plan’s Impact on Career:

   • Cole highlights the significance of the retirement plan’s impact on a person’s career, stating that a 2,000% difference in returns over a 40-year career could determine one’s ability to retire.

Conclusion:

Strive Asset Management’s new 401(k) retirement plan, centered around prioritizing shareholder value maximization, challenges the prevailing trend of ESG-focused investing. The company aims to set a new standard for retirement plans, asserting that the focus should be on working for the investor’s benefit rather than pushing values that may not align with their priorities. This move reflects a broader debate within the financial industry about the balance between profit maximization and ESG considerations.