Knowledge is Power

4 Questions Your 401(k) Provider Does NOT Want You To Ask

1. How much am I really paying in 401(k) management fees? This is confusing!

Most plan administrators have no idea how much their plan costs. Many 401(k) fees are hidden in mutual fund costs and it is difficult for a lay person to discern where the fees are generated. These costs are in addition to plan administration fees.  We have consulted with companies who assure us they pay NO plan fees, only to discover they are actually paying 1.5% – 3% in buried fund costs. Excessive fees erode your plan’s growth. Rosman Asset Management, LLC can interpret your plan’s total fee structure and assess its impact on your real value.

Our fees are usually far less for 401(k) management than other providers because we do not rebrand investment instruments to pad cost. As a Registered Investment Advisor we must always act in the best interests of our client; insurance companies and brokers are not required to do so.

Rosman Asset Management, LLC has access to ALL funds from any vendor and we find the best performing instruments at the lowest cost to our clients; we are not handcuffed to proprietary funds like most insurance companies. Our management fees are transparent so clients remain confident excessive or hidden costs are not compromising their 401(k) plan’s performance.

The 401(k) marketplace has traditionally charged between 1.5% – 3% in fees. Since true costs were difficult to discern, the market supported these excessive fees.  But changes in the law have made fee disclosure somewhat more transparent and plan sponsors can now choose a plan with lower fees.

Excessive fees cost you money and compromise your retirement readiness.

2. Who is monitoring my plan’s investments?

Most likely, nobody.

Plan administrators, by law, are responsible for ensuring that a 401(k)  is performing within certain standards if they are acting as a fiduciary of the plan. But most plan administrators do not understand these standards and do not have the time or expertise to successfully monitor a 401(k) plan’s investments. They often assume plan providers are acting as fiduciary and monitoring the investments within the plan when in fact they are not.

Insurance companies and brokers may sell you products within your plan but they typically do not act as a fiduciary or regularly monitor the investments within a plan.

Rosman Asset Management, LLC partners with companies to relieve them of fiduciary responsibility and monitor the plan’s investments. This protects the plan administrator, the plan participant, and the plan sponsor from liability due to poor plan management.

This link to the US Department of Labor website explains the importance of hiring a professional fiduciary to manage your 401(k) plan:

3. How has my 401(k) plan performed in comparison to other plans?

Do you know how your 401(k) has performed in comparison to other plans?   Have you asked?

Many investors contribute to their qualified plan and track its growth but do not realize that other plan managers are delivering better results. In some cases, MUCH better results. Poor plan performance costs you money.

Rosman Asset Management, LLC will compare your plan’s performance for the past 10 years against our portfolio results at no cost so you can evaluate if your plan is in the right hands.

4. Why don’t I have more options in my 401(k)?

Many 401(k) plans offer a limited selection of mutual funds from which an investor must choose. This can hinder your plan’s performance and increase plan costs. Rosman Asset Management, LLC has MANY options for qualified plan management, including individual equities, Exchange Traded Funds (ETFs) and a large selection of funds. We customize a plan for each client’s individual needs and offer active management for clients who want to capitalize on market shifts to protect and grow their assets.

Not sure what options are best for you? We will help you construct a diverse basket of investments designed to offer growth and protection appropriate for your goals.

3 Questions ALL 401(k) Plan Administrators Should Ask.