Since July of this year, new fee-disclosure rules took effect that requires full disclosure of 401(k) fees and expenses by financial firms offering to administer these plans. This disclosure, however, doesn't apply to sales and marketing materials like PowerPoint presentations which are typically used to convince business owners to offer their employees a 401(k) plan.
Choosing the wrong plan can lead to tens or even hundreds of thousands of dollars in excess fees over the course of someone's career. When evaluating different vendors, make sure to ask the following questions:
- How do you make your money?
- Are there any conflicts of interest with the companies that provide the investments?
- What are the expense ratios charged for the different investments you offer?
- Do you offer managed accounts and if so what are the fees?
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