Ready
Thinks s/he gets paid by the post
I am currently in the process of receiving bids for record keeping and advisory services for our company's 401K plan. So far I've received proposals from Wells Fargo and Fidelity/Morgan Stanley.
The record keeping fees have been quoted for between 14-19 bps, and the advisory services are 25 bps. I'm told that advisory services are not mandatory, but if we don't elect them, our company would be required to answer investment questions, and bear the liability of being sued if an employee feels they got bad advice.
So I have three questions:
1) Can I find a better solution for advisory fees than paying 25 bps? Does anyone charge either a flat fee, or hourly, for their services?
2) Is it risky to eliminate the advisor and go in house, and just select a variety of index funds to keep the investment selections very "safe"?
3) Does anyone have any recommendations beyond Fidelity/Wells/Vanguard?
We have Vanguard index funds in the plan now, and the thought of having to pay 45 bps on top of the index fund expense ratios is pretty unappealing, but I'm wondering if that's just part of the inefficiencies associated with managing a 401K plan.
The company has about $12M in assets in the plan, and 160 active participants, if that makes any difference.
If anyone has any insights they could share, it would be greatly appreciated.
The record keeping fees have been quoted for between 14-19 bps, and the advisory services are 25 bps. I'm told that advisory services are not mandatory, but if we don't elect them, our company would be required to answer investment questions, and bear the liability of being sued if an employee feels they got bad advice.
So I have three questions:
1) Can I find a better solution for advisory fees than paying 25 bps? Does anyone charge either a flat fee, or hourly, for their services?
2) Is it risky to eliminate the advisor and go in house, and just select a variety of index funds to keep the investment selections very "safe"?
3) Does anyone have any recommendations beyond Fidelity/Wells/Vanguard?
We have Vanguard index funds in the plan now, and the thought of having to pay 45 bps on top of the index fund expense ratios is pretty unappealing, but I'm wondering if that's just part of the inefficiencies associated with managing a 401K plan.
The company has about $12M in assets in the plan, and 160 active participants, if that makes any difference.
If anyone has any insights they could share, it would be greatly appreciated.