The company my mid-size employer has selected to administer our 401k plan has been terrible. To be fair, their customer service has been okay, but their fund selections are extremely limited. Even for their self-directed brokerage option, the selection is poor, each trade carries a $50 commission and, on top of that, the brokerage charges an additional $100 annual maintenance fee for doing nothing. Finally, their websites pales in comparison to most discount brokerages.Can anyone suggest a 401k administrator/brokerage that they think is really good?Thanks!
The custodians for 401k's out there are usually companies like Fidelity and Vanguard. You will want to ask, but usually they only work with large plans.The subject of custodians for smaller accounts comes up from time to time. Principal seems to be one often recommended. I have accumulated previous postings on this subject at message 17594 on this board.http://boards.fool.com/401k-services-20940711.aspx?sort=whol...Please keep us advised. If you find better choices please let us know.
There are hundreds of solutions out there - and the selection of one is a "fiduciary function" that should be performed with due care (and not through necessarily a bulletin board...). If the plan has an advisor or consultant, they should should be engaged to prepare an RFI or RFP to search for another provider (or force the current one to get better - in many cases options are available, but only to those who ask).As far as the brokerage window is concerned, $50 commissions is steep - but check if there are on-line options that are cheaper. Many use Schwab or TD Ameritrade for brokerage platforms, and both charge what I consider outrageous fees for phone call trades, but very reasonable fees for on-line trades.The $100 "maintenance fee" for having a brokerage account is actually pretty standard. Check your fee disclosure documents (required last summer, and annually thereafter). The recordkeeper gets "revenue sharing" from the core mutual funds in teh plan, but nada, zip, zilch for assets in brokerage accounts. To ensure all participants pay the freight, a maintenance charge is assessed. Fee disclosure documents should tell you more.
Go here and research your company:http://www.brightscope.com/Look for other companies your size and perhaps even in your industry and find out which ones they use and which ones are ranked the highest.For example, I did a search on Stake and Shake (a medium sized company with their HQ nearby). Their 401k has a lousy rating of 38 out of 100.OSI is the highest rated in their peer group, though still not very high rated.So, because I can't find one highly rated, I will simply search the entire directory (small link on top right near search field). A9.com has a great plan with only 15 mil in assets and 410 employees. Their plan is ranked 82 out of 100. Note, their ranking is this high primarily due to the amount of salary deferral allowed, and not because of the plan itself. Your employer determines the allowed deferral amount.Tool around that site and bit and you might find some help. Good luck.
Are you thinking that your employer might change their 401k plan on your recommendation? Most likely they looked for an administrator that provided acceptable service for a low cost to the employer. The high commissions and annual maintenance fees are an example of the employer getting a discount by passing costs on to the employee. Unless the employer is willing to bear more of the costs and adopt a better plan, no recommendation on your part will help.FuskieWho expects there are also term clauses and penalties in the agreement between the plan administrator and the employer which will preclude a quick transition even if it was desired...
One way to approach the problem of a poor 401k plan is to write a polite letter to the people in charge of your plan. (Your HR department can probably tell you who.) Tell them of your concerns.Sometimes contracts in place make changes difficult, but sometimes they will respond asking you to research and suggest alternatives. Perhaps improvements will follow.
Laz1 is asking for suggestions for a better 401k plan.http://boards.fool.com/best-401k-administrators-for-small-bu...You're the most recent one to ask the question. Can you share your findings? Did you find a better plan? Who do you recommend?Thanks. And best wishes.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |