Plan sponsors and advisors have to explicitly demand plan products and services and just as explicitly demand a specific charge for each element – something more than a fee summary sheet that is little more than “gobbledygook,” asserted speakers at a discussion entitled, “Are You Getting Your Money’s Worth?” at PLANSPONSOR’s Plan Designs Conference at a Chicago hotel.
Making the task more difficult are providers who combine certain fees – recordkeeping and administration, for example – and others who make use of often complex revenue sharing or soft-dollar arrangements, the speakers said.
“You as an advisor, and you as a plan sponsor, have to tell the provider what you want him to do,” said Russ Odenbeck, vice president Institutional Services at Marshall & Ilsley Trust, a panel member. “Until that happens, (fee) disclosure is going to be tougher and tougher.”
Jeb Graham, retirement plan consultant at CAPTRUST, agreed. “I need to tell you exactly what my expenses are,” Graham asserted. “You should expect that from any provider who is getting paid out of the assets of the plan.”
One issue that could affect the situation: Odenbeck said that the Department of Labor (DoL) is in the process of beefing up the 5500 form to include a detailed breakdown of “all costs being paid to anyone.”
At the end of the day, however, the two parties deeply affected by the plan’s fees are the ones who have to play a key role in gaining more openness and clarity.
Declared Odenbeck: “It’s definitely the advisors and plan sponsors who are going to have to change the trends of the industry.”