We recently came across a case involving a broker who collected a large asset- based deposit fee on the rollover deposits of a 401k plan with eight figures in assets.The plan was already under the broker’s control - it was not a takeover. The rational for the client to change plans was to improve the plan by lowering the investment costs. While the “fee” was disclosed (in small type) to the client in the agreement, we were doubtful the plan sponsor understood the significance of it.
This “fee” was really finder’s fee, also known as a commission.
Read More...Not a week has gone by this year without someone asking me about, or talking about ETF’s for 401k plans. The conversation is always about how ETF’s are low-cost, how they are growing faster than mutual funds, how they are transparent, and just generally how great they are in 401k plans. “All 401k’s should have them”, the articles go. Major 401k vendors have announced plans to use them, and many already market ETF’s in 401k’s. Some use them exclusively. But does the hype match reality?
Read More...With the passage of the new ERISA amendment here are four questions every Plan Sponsor should be asking.
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