Any experience with the ISCGroup?

[Ed B]

My daughter put her degree to work last Fall as a caseworker for a public mental health agency in Texas. She is now eligible to start contributing to a 401a and 457 plan. The custodian appears to be ISC Group from Dallas. DD has no acumen or interest in learning about investing but she did ask me for some advice.

She was advised to be aggressive at her age, which I agree with. I asked her what funds were available? She said she had no idea and that some guy with ISC Group said he would make the investments and move things around as needed. That could be fine but it scares me for her sake.

I can't see much in the way of investment options on their website but I see that target date funds are mentioned on the brochure she brought home. I also see they sell annuities.... I couldn't find anything on fees but as they are a private firm I am not optimistic in that regard.

Even if ISC is an expensive firm she still needs to get all the matching money she can which is she contributes 4% they contribute 8%.

Any info is appreciated.

 

[OldShooter]

One thing I have seen occasionally is egregious fees to participants. She can ask HR for a "404a-5 Participant Fee Disclosure" or equivalent and read carefully maybe with you to help. I saw one where there was a 1.5% annual fee charged to each participant. This pretty well wipes out the advantage of low-fee mutual funds.

If the fees are not OK, she should probably contribute enough to get the match then put everything else into an IRA or a Roth at a brokerage house.

 

[pb4uski]

.....She said she had no idea and that some guy with ISC Group said he would make the investments and move things around as needed. ....

Not OK.... no matter who the custodian is.

 

[Sunset]

Not OK.... no matter who the custodian is.

+1
When I read that I thought it was very weird, have only had 401K's and none of them were like that.

 

[Clone]

A number of years ago, one of my boys took a job with a company that had a 401k plan. No match. It was a small investment firm, and there were no positives for the participants. If there is no match, then a person should probably just roll their own.

 

[target2019]

She was advised to be aggressive at her age, which I agree with. I asked her what funds were available? She said she had no idea and that some guy with ISC Group said he would make the investments and move things around as needed. That could be fine but it scares me for her sake.

It scares me too. Good time to start a conversation about things. Her interpretation of what's said might be a little off, but it will help her if you take a look at the plan and offerings. There is probably at least one not-so-bad fund you can help her find. Then she can ignore everything else. When my daughter asked about her first 403B, I helped her identify the total stock market fund, and she went 100% with that.

 

[Ed B]

Thanks for the responses. In a couple of days I hope to have the chance to have her log into the account and see what they have to offer. I will have her try to get answers on the investment company fees.

She is on board with opening an account with TD Ameritrade or Vanguard to invest anything beyond what is required for the company match.

 

[Sunset]

A number of years ago, one of my boys took a job with a company that had a 401k plan. No match. It was a small investment firm, and there were no positives for the participants. If there is no match, then a person should probably just roll their own.

Except that in a company 401K you can put away much more (about $18K) than the $6K in a private IRA/ROTH