401k fees (Advisory & RecordKeeping) for small employer (doc group)

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novemberrain
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401k fees (Advisory & RecordKeeping) for small employer (doc group)

Post by novemberrain »

This is for a small physician group.
Our balance is around 300k now. And there must be some 30-40 plan participants in the entire group. Some of the other physicians may have higher balances. I would estimate the net plan account balance to be less than $50M across all the plan participants.

I see I am being charged $800 per year as record keeping fee by the plan platform company (Fido). And another $500 as advisory fee by the "Wealth mgmt" company that manages our plan. The "wealth mgmt" company said that $800 is actually less than what Fidelity charges other plans of similar size

Is this high for a plan of our size ?

What can I do to get it reduced ?
bsteiner
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Re: 401k fees (Advisory & RecordKeeping) for small employer (doc group)

Post by bsteiner »

Find out what an actuarial firm would charge to administer the plan.

Why do you need a wealth mgmt company?
Topic Author
novemberrain
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Re: 401k fees (Advisory & RecordKeeping) for small employer (doc group)

Post by novemberrain »

bsteiner wrote: Thu Jun 17, 2021 7:22 pm Find out what an actuarial firm would charge to administer the plan.
Will do
bsteiner wrote: Thu Jun 17, 2021 7:22 pm Why do you need a wealth mgmt company?
I don't know. I am just an employee here. The employer (doc group) has been around for 2 decades and I have been here just a couple of years. For whatever reason, the employer contracted out the 401k setup to a wealth mgmt company.

I can ask our HR admin whether they can think about getting rid of the wealth mgmt company. But these changes move at glacial pace here.

Also, that still leaves the $800 record keeping fee that fidelity is charging me.
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unclescrooge
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Re: 401k fees (Advisory & RecordKeeping) for small employer (doc group)

Post by unclescrooge »

novemberrain wrote: Thu Jun 17, 2021 5:08 pm This is for a small physician group.
Our balance is around 300k now. And there must be some 30-40 plan participants in the entire group. Some of the other physicians may have higher balances. I would estimate the net plan account balance to be less than $50M across all the plan participants.

I see I am being charged $800 per year as record keeping fee by the plan platform company (Fido). And another $500 as advisory fee by the "Wealth mgmt" company that manages our plan. The "wealth mgmt" company said that $800 is actually less than what Fidelity charges other plans of similar size

Is this high for a plan of our size ?

What can I do to get it reduced ?
That actually seems reasonable.

Most TPA companies charge $1-2k/year and a per participant charge of $3 or $4 per month. So that would be $1080 on the low end.

Then the custodian charges $1-2k/yr as well, plus a percentage of assets under management.

Then you pay advisor on the account. Usually either flat fee or percentage of assets under management.

Are you sure that's all you're paying???
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novemberrain
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Re: 401k fees (Advisory & RecordKeeping) for small employer (doc group)

Post by novemberrain »

unclescrooge wrote: Thu Jun 17, 2021 8:11 pm That actually seems reasonable.
Good to know.
unclescrooge wrote: Thu Jun 17, 2021 8:11 pm Are you sure that's all you're paying???
Ha ha. Now that you mention it, I will take a second look. I do know that the advisor put us in a slightly higher fee S&P index fund. I mean it's not much, just 0.10, but far higher than the 0.03 that vtsax charges .
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unclescrooge
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Re: 401k fees (Advisory & RecordKeeping) for small employer (doc group)

Post by unclescrooge »

novemberrain wrote: Thu Jun 17, 2021 9:28 pm
unclescrooge wrote: Thu Jun 17, 2021 8:11 pm That actually seems reasonable.
Good to know.
unclescrooge wrote: Thu Jun 17, 2021 8:11 pm Are you sure that's all you're paying???
Ha ha. Now that you mention it, I will take a second look. I do know that the advisor put us in a slightly higher fee S&P index fund. I mean it's not much, just 0.10, but far higher than the 0.03 that vtsax charges .
Maybe that's the platform fee being passed onto the employees via a higher expense ratio.
Advantageseeker
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Re: 401k fees (Advisory & RecordKeeping) for small employer (doc group)

Post by Advantageseeker »

Are you saying that you are being charged as an individual? The company should be paying all the fees and your company should be dealing directly with Fidelity - no middle person needed. Most fees are negotiable with Fidelity and Vanguard.
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