Recently, one of our financial planning/wealth management clients asked us to coordinate his assets under our management with his 401(k) plan assets. Unfortunately, we found the task impossible because his investments — while they had familiar names like Janus, TRowe Price, Fidelity, etc. — bore no resemblance to the actual investments of the same names.
The problem we uncovered was a “plug-and-play” 401(k) plan on an insurance company platform. This is the “the dirty little secret” in the small to medium-sized plan market: insurance company plans are generally very expensive, but many investors are unaware and even believe they are free due to not seeing any “direct” charges. There is no transparency with these plans. They don’t show the participant balances as shares, they are shown on the statements as units – fund shares with additional imbedded costs.
As 3(38) ERISA fiduciaries who are CEFEX-certified, we are transparent, espousing full disclosure and building plans with no load mutual funds. Call us for a free analysis. What you don’t know can cost you!