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401k Plan adviser fee question
Posted on 3/28/17 at 12:24 pm
Posted on 3/28/17 at 12:24 pm
Should participants be paying an adviser fee on index funds that are part of the fund lineup? They don't even get scored in our quarterly scorecard fund review.
Posted on 3/28/17 at 5:35 pm to Serraneaux
Are you asking theoretically or in practice? Because you usually do, but they should be less than .2%. It seemed like you were posting this to complain though.
Posted on 3/28/17 at 6:09 pm to TheWalrus
I think he's meaning in addition to his funds.. his 401k plan may have the option to pay for an advisor service for an extra charge to manage their available funds.
Posted on 3/28/17 at 6:17 pm to Serraneaux
Yes.
There are thousands of index funds out there, the adviser likely used his/her time to keep you invested in a safe index fund that doesn't track some bizarre set of characteristics and also trades at respectable spreads.
There are thousands of index funds out there, the adviser likely used his/her time to keep you invested in a safe index fund that doesn't track some bizarre set of characteristics and also trades at respectable spreads.
Posted on 3/28/17 at 6:39 pm to TheWalrus
Yes, that's a different fee.
We added a brokerage link option where those funds fall outside the adviser fee and that got me wondering about paying the adviser fee on index funds.
The adviser isn't really doing anything and is stubborn so most people are going to just go to the brokerage link option and not pay the adviser fee.
We added a brokerage link option where those funds fall outside the adviser fee and that got me wondering about paying the adviser fee on index funds.
The adviser isn't really doing anything and is stubborn so most people are going to just go to the brokerage link option and not pay the adviser fee.
Posted on 3/28/17 at 6:40 pm to Dellort
I get it but it doesn't take long to do a fund screen and find a large cap growth index fund.
The adviser fee is literally wiping people's match out.
The adviser fee is literally wiping people's match out.
Posted on 3/28/17 at 8:14 pm to Serraneaux
Depends. If they are a fiduciary for the plan then a fee on total plan assets is usual. The selection of an index fund is not a big deal to accomplish and the major constraint is typically liquidity. But most index funds are typically in a plan as a concession to low fee pressure and paired with an active fund in the same category.
If they are a commission based advisor then I would say no...but it is probably part of many platforms especially the insurance based ones.
If they are a commission based advisor then I would say no...but it is probably part of many platforms especially the insurance based ones.
Posted on 3/28/17 at 8:16 pm to Serraneaux
quote:
The adviser fee is literally wiping people's match out.
That's definitely way to steep then. Do you happen to know the size of the plan? It might not all be going to the adviser. The issue with small plans is that you have an adviser, third-party administrator, and platform provider all get a cut.
I'm guessing maybe a Nationwide plan?
Posted on 3/28/17 at 8:51 pm to Dellort
We don't have much of a match which is part of the problem. We pay a record keeping fee that the company pays. Small plan < $50 million.
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