The Future after Fee Disclosure and the Crystal Ball

WASHINGTON, DC - MARCH 29:  Wal-Mart's executi...
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Clarity of fees will help all involved in the end product of retirement plans. This will insure all those getting paid by the plan are adding value to plan participants and beneficiaries.

A plan sponsor who fulfills their role as a plan fiduciary by shopping around to determine whether their fees pay are reasonable, are a threat to only those providers that may unreasonable fees.While there is this mentality that fee disclosure will simply create a race to the bottom to find the lowest fees, I still don’t buy that. The reason I don’t buy that is that many low cost providers aren’t very good whether it comes to day to day  plan administration.  The other reason is that again I don’t see most plan sponsors doing the due diligence in finding what the cost of plan services are in the marketplace.  The third reason is I don’t see plan services as being a service where price is the most important consideration. While I often fault plan providers in not stressing their value as plan providers, I don’t believe that someone who wants to be the Wal-Mart of plan services will do very well because I don’t see it as a business where price has been the overall consideration. It never has been and I don’t think it ever will. Like other professional service like law, medicine, and accounting, advertising that you have the lowest fees isn’t going to be the best selling point. At least that is my opinion.

Great insight into what plan sponsors should be concerned with and are not . And plan providers who would prefer to keep fees hidden.

Please comment or call to discuss how this affects your company retirement plan.

  • Smart Investor – Why Fees Matter for 401(k) Plan Fiduciaries, But Not Defined Benefit Pension Plans (
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  • Things employers should tell employees about their retirement plan as new participant fee disclosure rules come into effect (
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