There's a popular technique many within the 401(k) industry use to benchmark plan fees. It's called "All-In" and it's meant to aggregate all the fees involved in all aspects of the 401(k) service industry.
It sounds like a nice concept and was recently featured in an Investment Company Institute Report (see "Study Shocker: 9 of 10 401(k) Plans Exposed to Increased Conflict-of-Interest Risk," FiduciaryNews, November 29, 2011). Unfortunately, this method of calculating fees contains a fatal flaw that might just hurt 401(k) investors' chances to retire in comfort.
Sit down. This might be a little controversial for some. It flies flat into the face of a certain academic "consensus" (N.B.: all academic progress requires the ability to boldly stare down conventional consensus and blaze new trails). It's a documented standard on at least one regulator's web-site (although that same regulator recently backed down and tried to erase any incriminatory tracks).
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Christopher Carosa
Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).
