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Are Your 401(k) Fees “Reasonable?” Benchmark Them to Find Out
Posted Eric Droblyen on Jun 28, 2017
If you're a 401(k) plan sponsor, you have a fiduciary responsibility to only pay reasonable plan fees and expenses from plan assets. Keeping 401(k) plan fees in check is one of your most important fiduciary responsibilities because even small excessive fee amounts each year can substantially reduce a participant nest egg over decades of saving. Excessive 401(k) fees can also mean severe ...
Fee Study of 525 401(k) Financial Advisors – Why Trump Can’t Reverse Tide of Fiduciary Advice
Posted Eric Droblyen on Apr 5, 2017
This week, the DOL delayed the effective date of its Fiduciary Rule – which would define all retirement plan financial advisors as ERISA fiduciaries, effectively banning conflicted 401(k) investment advice that puts advisor profit ahead of client interests – by 60 days from April 10, 2017 to June 9, 2017. The delay was triggered by a memorandum from President Trump that directed the agency ...
The Top 4 Lies Told by 401(k) Providers
Posted Eric Droblyen on Mar 22, 2017
After the death of his beloved mother, Harry Houdini was desperate to contact her from beyond the grave with the help of psychic mediums – who claimed an ability to communicate with the dead. Mediums were very popular at the time, but it didn’t take long for Harry to discover they couldn’t do what they promised. Upset, Harry became determined to expose their lies to protect unwitting ...
401(k) Fees – Frequently Asked Questions by Plan Fiduciaries
Posted Eric Droblyen on Mar 8, 2017
Small businesses that sponsor a 401k plan have a fiduciary responsibility to only pay necessary and reasonable fees from plan assets. Keeping 401k plan fees in check is one of the most important fiduciary responsibilities because excessive fees reduce investment returns unnecessarily, making a comfortable retirement for plan participants less affordable. Not meeting this responsibility can ...
Finding Hidden 401(k) Fees in Participant Disclosure Notices
Posted Eric Droblyen on Feb 8, 2017
In a 2015 study of 4,368 retirement plan participants, the National Association of Retirement Plan Participants (NARPP) found that 89% could not correctly calculate their account fees. Even more disturbing, only 42% knew they were paying fees at all. Most plan participants – 58% - were unaware that fees were being “automatically” deducted from their account.
Our Top 10 401k Blogs of 2016: What Topics Were the Most Popular?
Posted Eric Droblyen on Dec 28, 2016
Happy Holidays from the Frugal Fiduciary! As 2016 comes to a close, we looked back through this year’s blogs to find the most read. It turns out our most popular blogs related to the following topics:
401k Fees: Are Traditional 401k Services Worth a Smaller Retirement Nest Egg?
Posted Eric Droblyen on Nov 16, 2016
I have a confession – my company’s participant benefit statements are nothing special. While they disclose all the requisite information, they are matter-of-fact and lack color graphics. They’re also delivered electronically, not mailed.
Asset-Based 401k Admin Fees Are Unreasonable; Fiduciaries Should Avoid Them
Posted Eric Droblyen on Oct 19, 2016
20 years ago, 401k plans were free. OK not really, but 401k providers used this lie a lot to sell 401k plans to small businesses that didn’t want to pay any out-of-pocket 401k fees. In truth, these plans paid “indirect” fees - like revenue sharing paid by mutual funds and/or wrap fees paid by insurance company variable annuities – to 401k providers based on a percentage of plan assets.
3 Questions for Calculating Small Business 401k Provider Fees
Posted Eric Droblyen on Oct 5, 2016
Small businesses have a fiduciary responsibility to pay only reasonable 401k plan fees. The problem? Too many 401k providers bury their fees in complex disclosure documents. When 401k fees are hard to find, it can be easy for 401k fiduciaries to pay too much for 401k services. When this happens, participant returns are handicapped unnecessarily and fiduciary liability is increased.
Is Human 401k Advice More Expensive Than Robo Advice? You Might Be Surprised
Posted Eric Droblyen on Sep 7, 2016
A new development in the small business 401k industry is the “robo” 401k provider. These providers use a computer algorithm, instead of a flesh and blood financial advisor, to construct investment portfolios for 401k participants. They claim technology is a less expensive alternative to human advice.
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