As the 401(k) industry gets more tightly regulated, with the Department of Labor fiduciary rule and more employee class-action lawsuits, we’re increasingly seeing an ever-greater need to keep 401(k) fees in check. When you’ve been working with the same advisor for years or haven’t had the chance to run your own independent benchmark on your 401(k) plan, bad fee practices can be entrenched in your plan without you even realizing it.
It’s hard to know when something’s gone wrong, or when the Department of Labor has changed how they’re handling something. This is only compounded when you account for situations like manual payroll processing or dense, lengthy 401(k) communications that are easy to ignore and are difficult to comprehend.
Department of Labor Fiduciary Rule: Basic Guidelines
The good news is by understanding the new Department of Labor fiduciary rule and following their guidelines, you’re in much better shape when it comes to lowering fees and dropping fee practices that can create conflicts of interests between you and your advisor. The fiduciary rule is aimed at removing conflicted fee practices that incentivize some advisors to make recommendations that would allow them to collect more fees from the 401(k) plan, but aren’t necessarily in the best interest of your employees.
To learn more about the fiduciary rule and get a free checklist that you can send directly to your 401(k) advisor to quickly assess whether they may be currently offering conflicted advice, check out our Department of Labor fiduciary rule handbook.