The Frugal Fiduciary Blog

401k Disclosure Rules Are Out of Date; It’s Time for Common Sense Reform

Posted by Eric Droblyen on Jun 1, 2016

It probably won’t surprise you to learn that government 401k regulations are often inefficient or ineffective. That’s too bad because superfluous regulation generally increases the cost of a 401k plan, which in turn, lowers participant returns.

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Topics: 401k fee disclosure, Fee Disclosure, 401(k)

Wall Street Journal article proposes sweeping changes to improve small business retirement plans – including simplifying fee disclosures and requiring index funds. Here’s our analysis.

Posted by Greg Carpenter on Jun 20, 2014

Photo credit: WSJ Live
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Topics: retirement plans, index funds, fiduciary, 401(k) Investments, 401k blog, Fee Disclosure, small business 401k, 401(k)

Industry heavyweight SPARK weighs in on 408(b)(2) fee disclosure reform. We take issue with their key point.

Posted by Greg Carpenter on Apr 24, 2014

SPARK Weighs in on 408(b)(2)
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Topics: 401k blog, 408(b)(2), Fee Disclosure, small business 401k, DOL

Guess what percentage of ETF assets are actively managed?

Posted by Greg Carpenter on Oct 8, 2013

ETF Assets
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Topics: 401k blog, ETF, 401k fees, Fee Disclosure

Life After the 401k Fee Disclosure Rule

Posted by Greg Carpenter on Jul 23, 2013

Image courtesy of Stuart Miles at FreeDigitalPhotos.net
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Topics: 401k fee disclosure, 401k blog, 401k fees, fee transparency, Fee Disclosure, 401(k)

Follow the Money on 401k Fee Disclosures

Posted by Greg Carpenter on Jun 5, 2013

Image courtesy of digitalart at FreeDigitalPhotos.net

I recently read a story on FoxBusiness.com titled, “401k Disclosures Not Working For Investors.” The article made the point that participant fee disclosures are at best confusing, and at worst, completely ignored.

Friends, it should come as no surprise that I am in favor of more 401k fee disclosures, presented with total clarity. As I have blogged about many times in the past, hidden fees eat away at retirement savings. And these disclosures have got to be crystal clear. All the information in the world won’t help you if it’s written in a language you don’t understand. Are we getting either with the current fee disclosure regs?

No. Here’s why -

Joshua Itzoe, a Certified Financial Planner (full disclosure: Employee Fiduciary has common clients), was interviewed for the story. Here’s an excerpt:

The fee disclosure forms are "the retirement industry's version of Y2K," according to Itzoe. "The anticipated impact was much more than what actually came to pass. I don't think the forms worked as anticipated."

Itzoe is particularly disappointed that fees are expressed as a dollar figure for every $1,000 invested. That means participants must perform various calculations to arrive at their total fees from a percentage standpoint, he says.

"That's the best we can do for people?" he asks. "How many people actually did that work?"

If 401k fee disclosures aren’t working for plan participants OR financial advisors...who exactly are they working FOR?

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Topics: 401k blog, 401k fees, Fee Disclosure, 401(k)

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