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HOW DOES MY 401K PLAN , COMPARE TO OTHER SIMULAR PLANS. ARE MY PLAN FEES TO HIGH.

Apr 02, 2017 in  |  Flag
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In order to really compare your plan, it is good to first find out how many people are in your plan and how much money is saved in the plan. If your company just recently established the plan and hardly anyone is contributing any money, you will probably find the fees are quite high relative to the investments because there are some hard dollar costs to establishing and maintaining a plan. The costs don't really increase that much when there is more money being managed, so the fees tend to decrease significantly in reference to the amount of money being managed. A good advisor should be able to show you a comparison and with some new Department of Labor rulings coming out, everyone involved in administering the plan should be doing comparisons on a regular basis or could be facing some serious fines. Things you can do to make an informed decision are to look at what fees are being charged. You can research specific funds with Brightscope and see where those funds range in cost compared to others. The best 401k plans tend to have a lot of index funds available because they are low fee and tend to match their benchmarks. Find out what you are paying the advisor as well. Most advisors charge anywhere from 25-100 basis points and some just do a flat fee. It is usually customary for advisors to not charge more than 50 basis points on a group retirement plan and these should always be negotiable. Be aware of extra commissions on your funds as well and make sure there are no hidden fees such as 12b-1 fees that the funds charge as they can be kick backs to advisors and/or investment companies. There is a lot more we can discuss and your advisor should be going over these with you. If not, myself or any other good Registered Investment Advisor would be happy to.

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