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401k meeting today. Right way to ask about high fees??
Posted on 10/26/16 at 7:13 am
Posted on 10/26/16 at 7:13 am
So we have our annual 401k meeting today and we are getting raped on fees. I understand that they will always be more expensive within a 401k as opposed to buying directly from a fidelity or vanguard. However I feel ours are exorbitant.
Vanguard total stock has I believe .07 for investors shares from vanguard. Our total stock retirement account fund has 1.25. I may be wrong but I feel this is crazy. And this is by far the cheapest of our options. Others are approaching 2.
What is the right way to ask about these fees without making the guy who negotiates our plan look like he sucks at his job?
The guy who is in charge of our plan was a former sales rep who I believe has no idea what he is doing.
Any suggestions on what would be the most tactful way to approach this subject?
I'm guessing some of you have had the same issue and I'm interested in how you handle it.
Vanguard total stock has I believe .07 for investors shares from vanguard. Our total stock retirement account fund has 1.25. I may be wrong but I feel this is crazy. And this is by far the cheapest of our options. Others are approaching 2.
What is the right way to ask about these fees without making the guy who negotiates our plan look like he sucks at his job?
The guy who is in charge of our plan was a former sales rep who I believe has no idea what he is doing.
Any suggestions on what would be the most tactful way to approach this subject?
I'm guessing some of you have had the same issue and I'm interested in how you handle it.
5
Posted on 10/26/16 at 8:42 am to ragacamps
a question for you: are you getting a match with your 401k? If yes, then the fees you are paying are likely much less than the match so you are coming out ahead anyway. If no, than stop contributing to that plan and make your own (SEP IRA, solo401k, etc) as an individual.
as far as how to approach it, just be direct and honest. tell them that the fees on your plan are too high and what the other options are. Is there a target date fund you might could choose? Those generally have lower fees.
Also, who is the 401k with?
as far as how to approach it, just be direct and honest. tell them that the fees on your plan are too high and what the other options are. Is there a target date fund you might could choose? Those generally have lower fees.
Also, who is the 401k with?
Posted on 10/26/16 at 9:07 am to ragacamps
Have you looked at the actual fees of the 401(k) or just judging based on the mutual fund fees?
Yes, there are other fees besides mutual fund expense ratios to consider
Different share classes pay different fees to the plan administrator or even back to the participants and are used to offset expenses of the plan.
You should read the annual fee breakdown to figure out how the TPA, the Advisor and others are paid.
I assume you have looked up the FORM 5500 for your plan already??
Yes, there are other fees besides mutual fund expense ratios to consider
Different share classes pay different fees to the plan administrator or even back to the participants and are used to offset expenses of the plan.
You should read the annual fee breakdown to figure out how the TPA, the Advisor and others are paid.
I assume you have looked up the FORM 5500 for your plan already??
Posted on 10/26/16 at 9:15 am to ragacamps
quote:
What is the right way to ask about these fees without making the guy who negotiates our plan look like he sucks at his job?
Simply ask them to explain how the plan is structured. Explain that you feel that the expenses within the fund line up are high and would like to better understand the fee structure.
401(k) Plan are becoming more transparent but can still be very complicated, especially when discussing fees...it is very annoying. You need to look at the overall plan fee structure. Good luck, hope they can provide you with some insight.
Posted on 10/26/16 at 11:03 am to ragacamps
I just met with our company's 401k guy today through Lincoln financial and his rate is .25%. He said something about owing a fiduciary duty to my employer and everyone involved in the plan, which may make that rate lower than normal, but I'm not entirely sure. Just wantedto give you a reference point.
This post was edited on 10/26/16 at 1:35 pm
Posted on 10/26/16 at 9:44 pm to ragacamps
there's a report that's created annually breaking down the fees. You probably have access to it online. investment expenses (1% average unless its an index), advisor compensation (.25-.5% usually), provider charges (.4-.5%), and third party advisor fees ($25 per participant/yr + plus cost to do tax return, etc. I'd imagine 1.3-1.5% total is average especially for plans under $3 million.
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