Invesmart Plan Fee Benchmark Set at 57 bps

November 14, 2005 ( - The latest estimate from Invesmart about the "reasonable" standard for the annual fees paid by a plan participant with an equity portfolio has been set at 57 bps.

An Invesmart news release said that the figure represents a 9.5% fee decline from last November’s guideline of 63 bps.   A 60/40 equity/fixed income portfolio should cost plan participants no more than 50 bps, down from 55 bps in November 2004.

“Our ‘barometer’ is showing that mutual fund firms are paring back on their investment management fees, a trend that benefits America’s retirement plan participants,” said Rob Rossi, VP & Director of Investment Research for Invesmart in the news release.   “In fact, we noted a fee reduction year over year in every asset class we studied.   While fees cannot decrease indefinitely; mutual fund companies have the ability to trim back operating expenses at the margin as mutual funds gain assets and realize larger economies of scale.”

Following is the average investment management fee for November 2005 and November 2004 respectively:

  • Large Cap US Equity – 44 bps, 48 bps
  • Small/Mid Cap US. Equity – 88 bps, 95 bps
  • International Equity – 61 bps, 73 bps
  • US Fixed Income – 40 bps, 44 bps
  • Cash Alternatives/Ultra-short Term Bonds – 29 bps, 45 bps

More information about the company is at .