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Old 06-26-2019, 07:48 PM
 
164 posts, read 177,717 times
Reputation: 48

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Our company's current 401k is bad, considering high expense fees (2.2%). Finally we have another adviser coming to pitch his services, 401k. I know about the fees and I know to push for ability to have index funds at low cost, but what else??? What questions should we be asking of a new 401k adviser?

Our meeting is tomorrow morning.

Thank you.
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Old 06-26-2019, 07:51 PM
 
4,717 posts, read 10,309,443 times
Reputation: 2294
Fund costs
Transaction costs
Costs for trading within a certain time frame
Fees
What funds will they be providing
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Old 06-26-2019, 07:51 PM
 
3,536 posts, read 1,350,218 times
Reputation: 6929
ask the advisor to eliminate annuities from consideration.
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Old 06-26-2019, 07:56 PM
 
164 posts, read 177,717 times
Reputation: 48
Quote:
Originally Posted by turkeydance View Post
ask the advisor to eliminate annuities from consideration.
Thanks. I am hearing lots of negative about annuities, but if adviser asks ... "Why"? what is the shortest answer?
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Old 06-26-2019, 08:02 PM
 
164 posts, read 177,717 times
Reputation: 48
Quote:
Originally Posted by rocafeller05 View Post
Fund costs
Transaction costs
Costs for trading within a certain time frame
Fees
What funds will they be providing
Can you please elaborate on the "Costs for trading within a certain time frame" ?
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Old 06-27-2019, 04:16 AM
 
Location: Colorado Springs
4,830 posts, read 4,944,472 times
Reputation: 17294
These folks always pitch "diversification."

I's ask for the correlation coefficients between their net past performance and no load broad market index funds.

In other words, make them justify their fees.
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Old 06-27-2019, 04:18 AM
 
71,474 posts, read 71,652,652 times
Reputation: 49063
Quote:
Originally Posted by Pianist718 View Post
Thanks. I am hearing lots of negative about annuities, but if adviser asks ... "Why"? what is the shortest answer?
simple answers to complex questions are going to be the wrong answers usually
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Old 06-27-2019, 06:27 AM
 
Location: Outside US
1,178 posts, read 466,338 times
Reputation: 1539
Quote:
Originally Posted by Pianist718 View Post
Our company's current 401k is bad, considering high expense fees (2.2%). Finally we have another adviser coming to pitch his services, 401k. I know about the fees and I know to push for ability to have index funds at low cost, but what else??? What questions should we be asking of a new 401k adviser?

Our meeting is tomorrow morning.

Thank you.
High feds and clandestine stealing.

The 401K.

Vanguard Index Funds for me.
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Old 06-27-2019, 07:00 AM
 
164 posts, read 177,717 times
Reputation: 48
Follow up question ... it would help me if I knew exactly what it costs companies like ours to offer 401k. What determines the cost that company pays for offering 401k? thank you
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Old 06-27-2019, 07:25 AM
 
2,072 posts, read 703,003 times
Reputation: 5311
I agree on asking what ETFs they have. They don't need to have a zillion of them but they ought to have S&P 500, VTSMX (Vanguard Total Stock Market Index), etc. If all they offer is mutual funds, ask the questions people have posted earlier about expense ratios. I'm not opposed to paying expenses on mutual funds, but also look at the results NET of expenses. You could come prepared with some performance data
of basic indices such as the S&P 500, emerging markets, international, etc. over 1 year, 3 years, 5 years, etc. The representative should be able to show similar figures for their mutual funds and explain why they're different, if they are. (If he/she can't, that tells you something, too.)

If there are no ETFs, ask if there are plans to include them in the future. Also ask what, for example, they'd recommend instead of the S&P 500 ETF and then compare results with your cheat sheet.

I wish I could be a fly on the wall!
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