What is your overall Expense Ratio (ER) on your portfolio?

[Like2Plan]

If this isnt a wake up call for those seeking a FA I dont know what is. Do your homework, stick to a simple investing approach like the 3 fund approach...invest in low cost funds...save yourself many thousands a year.

You make a very good point. I was thinking if I had to write a check at the end of the year for annual expenses, it would be more attention getting.

The ER's seem like such small numbers--but they have a big affect!

[Outdoorsygal]

I'm wondering what your plan's Brightscope rating is.

(Here is a link to a recent disccusion: Link to thread about Brightscope Ratings )

The ER for your investments are pretty good, but that 1% is pretty high. Do you work for a really small company?

My own estimation is the Company has about 30 people eligible for the 401k plan all at some supervisory level.
The remaining 60 or so employees are not offered a 401k.

The brightscope rating was 71. We use paychex inc which is also the company payroll provider. By law they must send a quarterly statement
with the fees but not required to provide it upfront. HR and the owner are clueless and since I already asked the most questions during the
presentation, hate to bother them further. Head of the company said don't ask her nothing, she has no clue about it

Not sure if you know much about it but maybe that would be a grade of a C-?? Does anyone else here know??
Thanks alot for this Like2Plan, I am going to do further research upon how they grade their Brightscope numbers.

[corn18]

0.084% It would be lower but I have a bond fund in my 401k that is 0.43% and accounts for 50% of my annual expenses. I would ditch it but it's my best option right now. So I spend about $500 a year on expenses.

My MIL pays 1.46% in ER and then another 1% for an FA. That amounts to about $32k / year in fees. I offered to get her into a nice three fund 25/75 portfolio and save her $31k / year, but she's not interested. She likes having an FA to talk to.

Tom

[Like2Plan]

0.084% It would be lower but I have a bond fund in my 401k that is 0.43% and accounts for 50% of my annual expenses. I would ditch it but it's my best option right now. So I spend about $500 a year on expenses.

My MIL pays 1.46% in ER and then another 1% for an FA. That amounts to about $32k / year in fees. I offered to get her into a nice three fund 25/75 portfolio and save her $31k / year, but she's not interested. She likes having an FA to talk to.

Tom

Tom,
I believe you are prior military. Do you by any chance still have a TSP account?
TSP accepts rolls ins of pretax money. The ER went up a little (I believe it was .029 and is now .038) for the G And F funds is not too shabby.

I bet a lot of folks would volunteer to talk to your MIL for 31k a year LOL. Oh well, you did your best.

[Like2Plan]

My own estimation is the Company has about 30 people eligible for the 401k plan all at some supervisory level.
The remaining 60 or so employees are not offered a 401k.

The brightscope rating was 71. We use paychex inc which is also the company payroll provider. By law they must send a quarterly statement
with the fees but not required to provide it upfront. HR and the owner are clueless and since I already asked the most questions during the
presentation, hate to bother them further. Head of the company said don't ask her nothing, she has no clue about it

Not sure if you know much about it but maybe that would be a grade of a C-?? Does anyone else here know??
Thanks alot for this Like2Plan, I am going to do further research upon how they grade their Brightscope numbers.

I am wondering if your company passes most of the plan operating cost to participants. I believe a lot of larger companies absorb some if not all the plan cost--plus there is an economy of scale where they can get the cost per employee down. Your company seems to offer low cost funds- that is encouraging. (But, I just don't know...) That 1% fee is pretty steep.

[Like2Plan]

I'm very impressed at the low blended ER numbers that folks are reporting!

[bennkar]

I'm very impressed at the low blended ER numbers that folks are reporting!

Yes, I find these low ERs amazing. I just went and checked my 457 plan numbers. The best I have is 0.04% and another at 0.07%. I have one that is 0.82% but... it does have the best performance for every period I checked (US small cap) from my current funds. The others range from 0.47 to 0.72 and here I thought these were good ratios. Now you got me thinking...

Add - On: As I thought on this, I think these numbers overstate the cost. Every year they do some type of expense "true up" and we end up get some type of rebate on the expenses paid. Two years ago it amounted to about 0.25% of the amount I had invested, so... maybe cut that from the overall ER, whatever that would come up as?

[MonkeyMama]

I always preach that "starting young" and "managing fees" are the two magic bullets when it comes to long-term investing.

Interestingly, my parents got sidelined by an investment brokerage house ($$$$) until about age 50. I have always been curious how much of a difference that will make re: our own investments. It should be quite substantial. (We said *F* this, in our 20s, but I think we just have a lot more access to investment information than our parents did. Thanks to the internet). My in-laws are still with scammy and ridiculously expensive brokerage house, in their 70s. For them, it is what it is. They don't feel comfortable DIY. If they aren't willing to take control of their own investments, then they will always be at the whim of scam artists.

[disneysteve]

I think we just have a lot more access to investment information than our parents did.

This is so true, and often underappreciated. There was a time not that long ago that there was no such thing as a discount brokerage. If you wanted to buy stock, you generally had to buy in 100 share lots and you paid steep commissions to do so. Today, you can buy stock for next to nothing and buy as few or as many shares as you'd like. You can buy ETFs for free. You can buy mutual funds for free and those funds have ERs that are a tiny fraction of one percent. And you can do it all from the comfort of your own home or really anywhere via your cell phone.

[Outdoorsygal]

I am wondering if your company passes most of the plan operating cost to participants. I believe a lot of larger companies absorb some if not all the plan cost--plus there is an economy of scale where they can get the cost per employee down. Your company seems to offer low cost funds- that is encouraging. (But, I just don't know...) That 1% fee is pretty steep.

The smaller the company, the larger the fees are. Or there is a strong correlation per my research. Often the employees absorb much of the cost of the 401k, including set up so the quarterly statement should disclose these fees and penalties. The info I have now is very limited

[Captain Save]

This is so true, and often underappreciated. There was a time not that long ago that there was no such thing as a discount brokerage. If you wanted to buy stock, you generally had to buy in 100 share lots and you paid steep commissions to do so. Today, you can buy stock for next to nothing and buy as few or as many shares as you'd like. You can buy ETFs for free. You can buy mutual funds for free and those funds have ERs that are a tiny fraction of one percent. And you can do it all from the comfort of your own home or really anywhere via your cell phone.

Past generations were also not so heavily invested in the stock market.. Employers had pension .. so they didn't worry about retirement as much as we do..