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.