401k Plan adviser fee question

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.

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.

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.

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.

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.