Good and evil have battled for millenia. In the end, who wins? In movies, and in business, it’s the one who is more persistent.
Retail sales were forever changed by the Wal-Mart discount model of making more items available in one location, the superstore. Amazon has changed it yet again with making even more items available without ever having to leave your home. (How can anyone compete with that? We’ll see, I guess.)
What are these giants of commerce competing for? Your business. Make no mistake, YOU, the consumer, are the all-powerful titan of industry. You tell the world what you want, you have the money that ‘they’ want, and when enough consumers agree on any wish or desire, a solution is presented to them because that solution will sell.
When thousands and millions cry out for something new, something to soothe their pain and end their frustration, yet no company steps forward with a solution… Well, that’s the stuff revolutions are made of.
It’s become quite apparent to me over the last 10 years that 401k savers want two things from their retirement accounts:
- Grow, baby, grow!
- Support my retirement lifestyle with sustainable income
There is only one thing standing in the way of both of these things from happening…
I have never met anyone who was happy to learn that their 401k plan’s consultant, broker, or financial advisor is, has been, and will be receiving a percentage of their account balance–every year, whether up or down–in exchange for the guidance, portfolio advice, and education they’ve been receiving. It’s not been good.
Obviously, this can’t surely apply to everyone in the country, and maybe there are some out there. But, I haven’t ever met them in 10 years.
I have, though, heard from plenty of you who are saving in your 401k and wonder why there are so many fees in your account, when you see advertisement after advertisement on television and in magazines for “low-cost ETFs” and “$4.95 trades” from the very same companies who provide 401k platforms to employers. Article after article has been written about the strategy of only contributing up to the company match, then finding a cheaper account option elsewhere. 401k fees are a drag on growth.
It’s 2018. Why haven’t these big firms fixed this yet? I can’t answer that for them.
I can, however, fix it for you. Small company plans (<100 employees) may have felt like they couldn’t negotiate better fees in the past. But, you don’t need to pay 401k broker fees anymore.
Regardless of the size of your company, or the size of your retirement plan, you can have a 401k or 403b plan that pays ZERO broker fees. If brokers aren’t helping much anyway, then let’s just cut them out.
If you took a pen and paper and started over completely from scratch, here’s how I think you would prefer to design your retirement plan:
- Low, flat fee for recordkeeping (website, tax records)
- Low fee schedule for administration (tax returns, loans, distributions, testing, etc.)
- Independent custodian to safeguard investments and fee billing
- Low-cost institutional class investments purchased at street rate (no markup)
- Fiduciary support for investment selection and review/monitoring
- Individual investment advice for each participant’s portfolio at a FLAT fee
And, because this is what you would probably prefer, this is what I’ve done. (After all, the more fees that are tied to a “percentage of assets”, the more unfair those fees become to participants with larger balances.)
You can see more details and get in touch with me at the Boss 401k page of my website.
Much like Amazon brought more items to consumers through the internet, I’m bringing personalized advice, low-cost investing, and fixed-cost administration to 401k plans through that same internet.
(How can anyone compete with that? We’ll see, I guess.)
Investment advisory services offered through First Advisors Network, a registered investment advisor.