Guideline 401k adds 0.08% aum fee

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z0r
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Guideline 401k adds 0.08% aum fee

Post by z0r »

Guideline is adding a 0.08% fee for participants (was no aum, $8/month/employee paid by the employer). They're announcing this as an offset for now charging no fees for random services that regular account holders never use, so this is a fee hike for most participants. The company-side fees look to be remaining the same.

Their announcement says "software pricing model" which to me, means "a model where they were operating at a loss to gain users, then planned to later raise prices". Well, it's later.

You asked, we listened: an update to Guideline’s fees
JEFF ROSENBERGER, PHD
03.MAY.2021
JBTX
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Re: Guideline 401k adds 0.08% aum fee

Post by JBTX »

So they are moving it from employers who get a tax deduction to employees who don’t.
2babogle
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Re: Guideline 401k adds 0.08% aum fee

Post by 2babogle »

So, now the inevitable question: what/who should we change to if we're not happy with this? Any other providers offering a deal to move in light of this? Is guide line still better than those it directly competes with?
JohnDindex
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Re: Guideline 401k adds 0.08% aum fee

Post by JohnDindex »

Goodness, it is a little annoying but the all in cost to own VTSAX is .12%

You are not going to find anything better in the 401k world IMO.

They have to make money. They are not transferring fees either, employers still pay participant fees.
somber
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Re: Guideline 401k adds 0.08% aum fee

Post by somber »

That matches the AUM fee charged by Employee Fiduciary.
Topic Author
z0r
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Re: Guideline 401k adds 0.08% aum fee

Post by z0r »

somber wrote: Wed May 12, 2021 6:04 am That matches the AUM fee charged by Employee Fiduciary.
thanks, this answers a few questions

yeah, it looks like they're still one of the best deals around

I was making a point about their saas-model "operate at a loss to buy market share" which is something to be aware of, although lock-in with a 401k provider isn't as bad as something like getting locked into capital gains in a fund that raises fees
Tamer Wurf
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Re: Guideline 401k adds 0.08% aum fee

Post by Tamer Wurf »

My company's plan is with Guideline as well. I am very disappointed that they do not allow the employer to cover this AUM fee. I can understand needing to increase fees, but why require employees to pay this out of plan funds?
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retired@50
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Re: Guideline 401k adds 0.08% aum fee

Post by retired@50 »

I realize no one likes extra fees, but in the realm of 401k plans we often see here on Bogleheads, this is one of the most acceptable to deal with.

Regards,
This is one person's opinion. Nothing more.
chrisdds98
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Re: Guideline 401k adds 0.08% aum fee

Post by chrisdds98 »

can you rollover most of your funds into an IRA? that would mean no backdoor roth but a lower fee
Charles6
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Re: Guideline 401k adds 0.08% aum fee

Post by Charles6 »

I would love to trade you. I’ve got Great West with a 60 bps wrap fee.
TIAX
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Re: Guideline 401k adds 0.08% aum fee

Post by TIAX »

Bait and switch. Hopefully, someone undercuts them soon.
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Watty
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Re: Guideline 401k adds 0.08% aum fee

Post by Watty »

retired@50 wrote: Wed May 19, 2021 5:14 pm I realize no one likes extra fees, but in the realm of 401k plans we often see here on Bogleheads, this is one of the most acceptable to deal with.

Regards,
+1

Unless I messed up a decimal point that is $80 a year if you have a $100K balance. If they otherwise have good fund choices that may not be ideal but it is nothing to fret about.
Tamer Wurf
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Re: Guideline 401k adds 0.08% aum fee

Post by Tamer Wurf »

chrisdds98 wrote: Wed May 19, 2021 8:30 pm can you rollover most of your funds into an IRA? that would mean no backdoor roth but a lower fee
Guideline does not allow for in-service rollovers to be in any of their plan documents.
Tamer Wurf
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Re: Guideline 401k adds 0.08% aum fee

Post by Tamer Wurf »

TIAX wrote: Thu May 20, 2021 12:24 am Bait and switch. Hopefully, someone undercuts them soon.
401GO is a fairly new platform, and is a bit rough around the edges compared to Guideline's interface, but offers Vanguard index funds, and is undercutting Guideline. They have a 0.07% AUM fee, but it can be born by the employer. My company's plan assets are 90% owned by company owner/family, so the company being able to pay & deduct the fee is desirable. Additionally, the employer's monthly headcount fee is lower, and has no base monthly fee. They also offer SIGNIFICANT flexibility in plan document design. Guideline is extremely rigid.

Both 401GO and Guideline are a 3(16) and 3(38) fiduciary.


If you have a large amount of employees/plan assets, Vanguard/Ascensus is a great choice. Vanguard's old 401k platform was mediocre, but since partnering with Ascensus it has become very good.
TIAX
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Re: Guideline 401k adds 0.08% aum fee

Post by TIAX »

Tamer Wurf wrote: Thu May 20, 2021 12:05 pm
TIAX wrote: Thu May 20, 2021 12:24 am Bait and switch. Hopefully, someone undercuts them soon.
401GO is a fairly new platform, and is a bit rough around the edges compared to Guideline's interface, but offers Vanguard index funds, and is undercutting Guideline. They have a 0.07% AUM fee, but it can be born by the employer. My company's plan assets are 90% owned by company owner/family, so the company being able to pay & deduct the fee is desirable. Additionally, the employer's monthly headcount fee is lower, and has no base monthly fee. They also offer SIGNIFICANT flexibility in plan document design. Guideline is extremely rigid.

Both 401GO and Guideline are a 3(16) and 3(38) fiduciary.


If you have a large amount of employees/plan assets, Vanguard/Ascensus is a great choice. Vanguard's old 401k platform was mediocre, but since partnering with Ascensus it has become very good.
Thanks, I hadn't heard of 4012GO. Any thoughts about going with the basic plan to avoid the 0.07% fee? https://401go.com/pricing/
Tamer Wurf
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Re: Guideline 401k adds 0.08% aum fee

Post by Tamer Wurf »

TIAX wrote: Fri May 21, 2021 9:41 pm
Tamer Wurf wrote: Thu May 20, 2021 12:05 pm
TIAX wrote: Thu May 20, 2021 12:24 am Bait and switch. Hopefully, someone undercuts them soon.
401GO is a fairly new platform, and is a bit rough around the edges compared to Guideline's interface, but offers Vanguard index funds, and is undercutting Guideline. They have a 0.07% AUM fee, but it can be born by the employer. My company's plan assets are 90% owned by company owner/family, so the company being able to pay & deduct the fee is desirable. Additionally, the employer's monthly headcount fee is lower, and has no base monthly fee. They also offer SIGNIFICANT flexibility in plan document design. Guideline is extremely rigid.

Both 401GO and Guideline are a 3(16) and 3(38) fiduciary.


If you have a large amount of employees/plan assets, Vanguard/Ascensus is a great choice. Vanguard's old 401k platform was mediocre, but since partnering with Ascensus it has become very good.
Thanks, I hadn't heard of 4012GO. Any thoughts about going with the basic plan to avoid the 0.07% fee? https://401go.com/pricing/
The basic plan is for new plans only. Do you have an existing plan? Their basic plan also doesn't have a 3(38) relationship, so you would still need fiduciary liability insurance for your retirement committee.

Since our plan is rapidly growing (assets more than doubling every year), we decided to go with Vanguard/Ascensus.
sschoe2
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Re: Guideline 401k adds 0.08% aum fee

Post by sschoe2 »

That isn't too bad. As I posted last week, the company that bought the company that I work at has Principal Financial and they charge 0.36% aum so I am not happy about that (though even less happy they are moving the office/lab 40 miles away when I bought a house 4 miles from the current location).
Tamer Wurf
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Re: Guideline 401k adds 0.08% aum fee

Post by Tamer Wurf »

sschoe2 wrote: Mon May 24, 2021 11:40 am That isn't too bad. As I posted last week, the company that bought the company that I work at has Principal Financial and they charge 0.36% aum so I am not happy about that (though even less happy they are moving the office/lab 40 miles away when I bought a house 4 miles from the current location).
Principal is awful. I helped my last company move their plan from Principal to Vangaurd/Ascensus, and they are significantly more happy with them, even on the administration side; especially with the help of a 3(21) advisor. Ask if you could sit on their retirement committee. Most companies are happy to add new members.
sschoe2
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Re: Guideline 401k adds 0.08% aum fee

Post by sschoe2 »

Tamer Wurf wrote: Mon May 24, 2021 11:48 am
sschoe2 wrote: Mon May 24, 2021 11:40 am That isn't too bad. As I posted last week, the company that bought the company that I work at has Principal Financial and they charge 0.36% aum so I am not happy about that (though even less happy they are moving the office/lab 40 miles away when I bought a house 4 miles from the current location).
Ask if you could sit on their retirement committee. Most companies are happy to add new members.
Benefits are handled by the HR department. It is a sizable company. How would a Chemist get authority over benefits?
placeholder
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Re: Guideline 401k adds 0.08% aum fee

Post by placeholder »

chrisdds98 wrote: Wed May 19, 2021 8:30 pm can you rollover most of your funds into an IRA? that would mean no backdoor roth but a lower fee
For employee deferrals and designated roth contributions the law forbids in service rollovers unless the employee has reached age 59-1/2.
Da5id
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Re: Guideline 401k adds 0.08% aum fee

Post by Da5id »

Tamer Wurf wrote: Mon May 24, 2021 11:48 am
sschoe2 wrote: Mon May 24, 2021 11:40 am That isn't too bad. As I posted last week, the company that bought the company that I work at has Principal Financial and they charge 0.36% aum so I am not happy about that (though even less happy they are moving the office/lab 40 miles away when I bought a house 4 miles from the current location).
Principal is awful. I helped my last company move their plan from Principal to Vangaurd/Ascensus, and they are significantly more happy with them, even on the administration side; especially with the help of a 3(21) advisor. Ask if you could sit on their retirement committee. Most companies are happy to add new members.
My company went from Fidelity to Principal when we acquired, they are indeed awful. The overwhelming majority of funds offered had very high ERs

0.08% isn't actually too terrible, but certainly a step down from 0%.
Northern Flicker
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Re: Guideline 401k adds 0.08% aum fee

Post by Northern Flicker »

JBTX wrote: Tue May 11, 2021 6:37 pm So they are moving it from employers who get a tax deduction to employees who don’t.
Employees pay the AUM pretax in a trad 401K so the equivalent of a tax deduction.
My postings are my opinion, and never should be construed as a recommendation to buy, sell, or hold any particular investment.
JBTX
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Re: Guideline 401k adds 0.08% aum fee

Post by JBTX »

Northern Flicker wrote: Mon May 24, 2021 5:43 pm
JBTX wrote: Tue May 11, 2021 6:37 pm So they are moving it from employers who get a tax deduction to employees who don’t.
Employees pay the AUM pretax in a trad 401K so the equivalent of a tax deduction.
If employer is 35% tax bracket, employer pays.08 *.65. Employee pays.08. Not only that, the tax growth on the.08 is lost forever.
control
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Re: Guideline 401k adds 0.08% aum fee

Post by control »

z0r wrote: Tue May 11, 2021 10:28 am The company-side fees look to be remaining the same.
They've actually increased the company fees somewhat as well. Overall a disappointing change.
Last edited by control on Mon May 31, 2021 1:55 pm, edited 1 time in total.
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