Save Money on the Cost of Your 401(k) Plan
Save Money on the Cost of Your 401(k) Plan
Many business owners believe the employer-sponsored 401(k) plan they offer to their firm is “free,” or somehow automatically low-cost because it is a retirement plan.
After all, fee reports outlining the calculation of pricing, or the cost to administer, may not be provided on a regular basis. In tandem with this perception, entrepreneurs are often unaware of the cost of their personal investment advice either. One cause is providers who imply their services are virtually free, while burying expenses beyond view.
Kerri and Dan’s experience illustrates this important concern. Kerri and Dan are entrepreneurs who own a law firm that they have grown into a successful business, with close to one hundred employees. They established a company 401(k), so that they and their employees could save consistently for retirement. Believing their 401(k) to be virtually free, they hired the same advisor who provided the 401(k) to assist them with the management of their personal assets. It did not occur to them that the absence of a quarterly fee report outlining the calculation of pricing–for both their company 401(k) and personal portfolios–was a signal of hidden costs.
What prompted Kerri and Dan to question their current financial advisory relationship and to schedule a meeting with Entrust for a second opinion? It was the attention-getting new regulations, applicable to employers offering a company 401(k). The new governmental regulations, which among other things emphasizes the employer’s responsibility to provide transparent fee disclosures, caused Kerri and Dan to realize that they were not exactly sure what their investment management expenses were.
Entrust’s fee-based business model and long-standing commitment to transparent reporting of investor costs appealed to Kerri and Dan. Our work together led to the identification of hidden expenses that were substantial. We were then able to provide a proposal to fulfill their 401(k) and personal investing needs that utilized transparent fee reporting and less expensive investment management.
Common examples of hidden expenses that many investors pay without realizing it include:
- Revenue sharing among mutual funds, another investment company and the advisor
- Monthly administrative fees that provide additional compensation
- Excessive internal expenses within mutual funds
Like Kerri and Dan, you may be ready to move beyond hidden costs such as those named above and instead, discover the benefits of a transparent fee model to fulfill your investing needs. We would love to start a conversation. Better yet, if you are a business owner and would like an evaluation of how much your “virtually free” firm 401(k) and personal financial advice
really costs.
Like Kerri and Dan, you may be ready to move beyond hidden costs such as those named above and instead, discover the benefits of a transparent fee model to fulfill your investing needs. We would love to start a conversation. Better yet, if you are a business owner and would like an evaluation of how much your “virtually free” firm 401(k) and personal financial advice really costs.
Entrust Financial LLC®
Wayne, PA | Phone: 610-687-3515 | Fax: 610-687-3595
Financial Advisors Serving in Pennsylvania: Montgomery, Chester, Philadelphia and Delaware Counties
Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP, which it awards to individuals who successfully complete initial and ongoing certification requirements. Disclosure | Privacy Policy | Relationship Summary | Firm Brochures
Certified Financial Planner Board of Standards, Inc
Our Mission:
We believe there is a better way to help clients preserve and build wealth. It begins with holistic planning based upon an understanding of what is most important to you, our client. Entrust is a proven, independent wealth management firm dedicated to your financial success.
