Best in Class 401k Providers (Recordkeeping and Advisor) - Recommendations Please!

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Topic Author
IndexFun
Posts: 13
Joined: Tue Jan 29, 2019 10:09 am

Best in Class 401k Providers (Recordkeeping and Advisor) - Recommendations Please!

Post by IndexFun » Tue Feb 04, 2020 10:01 pm

Hello Everyone,

I have decisionmaking authority over my company's 401k plan. We currently have $13million in plan assets and use Fidelity as our record keeper and a local advisor who handles 401k plans (and was recommended by Vanguard as being familiar with their recordkeeping platform). We also have our HSA platform through Fidelity so having everything on the NetBenefits platform is nice.

We got away from a terrible fee laden Transamerica plan with an expensive advisor, but I want to push our plan to literally be best in class for employees (for a plan/company of our size obviously). We made a few of the following improvements: index fund options (target dates included); auto-enrollment w/ auto investment selection into TDF based on age; after-tax contributions + in-service withdrawals for Mega Backdoor Roth; catch up contribution for the match (50% up to 6% of Salary) so you can front-load annually and not miss out on any matching.

Current recordkeeping fee: .52%
Current advisor fee: Blended rate .325% [0.40% per year for the first $5,000,000.00 of the plan assets; 0.35% per year on the next $5,000,000.01 to $7,500,000.00; 0.30% per year on the next $7,500,000.01 to $10,000,000.00; 0.20% per year for any amount over $10,000,000.01]

What other improvements could we make? Any recommended low-cost recordkeepers? Any recommended low-cost ERISA advisors who could handle a plan like ours?

What else should we be considering? Thanks in advance!

jacoavlu
Posts: 975
Joined: Sun Jan 06, 2013 12:06 pm

Re: Best in Class 401k Providers (Recordkeeping and Advisor) - Recommendations Please!

Post by jacoavlu » Wed Feb 05, 2020 8:31 am

That’s pretty ridiculous fees in my experience. Fidelity quoted us a much lower record keeping fee and we have a smaller plan.

Vanguard / Ascensus is the only flat fee record keeper I know of. Tends to be a lot of cost savings for a large plan. The fee works out to less than 10 bps for us for a much smaller plan.

I would also look for a flat fee advisor that’s not going to charge asset based fees.

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JamesSFO
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Re: Best in Class 401k Providers (Recordkeeping and Advisor) - Recommendations Please!

Post by JamesSFO » Wed Feb 05, 2020 8:43 am

Given that you have ~0.8-0.9% in fees on top of the funds that sounds atrociously expensive. All of the Fido 401Ks I've had did not have such exorbitant fees so start with getting those down.

Our small business ~$1M in the 401K has a Vanguard/Ascensus 401K which we pay $3K/year for out of the business; employees pay nothing except the fund fees.

ThePensiveInvestor
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Re: Best in Class 401k Providers (Recordkeeping and Advisor) - Recommendations Please!

Post by ThePensiveInvestor » Wed Feb 05, 2020 11:44 am

Guideline, by a long mile (guideline.com). Easy flat fee of $39/mo + $8/mo per participating employee. No AUM or other fees. All in one services, including recordkeeping. Great selection of Vanguard index funds, Admiral shares. Very easy intuitive website and you do everything online. I've selected them at two companies, one with 15 employees, the other with 500 employees, and couldn't be happier.

Topic Author
IndexFun
Posts: 13
Joined: Tue Jan 29, 2019 10:09 am

Re: Best in Class 401k Providers (Recordkeeping and Advisor) - Recommendations Please!

Post by IndexFun » Mon Feb 10, 2020 9:49 pm

Thanks everyone! Looks like Ascensus and Guideline are where I will begin to do some comparison. I will keep everyone posted with what we end up going with.

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