A new trend in 401(k)s: Small businesses trying to figure out just where all their service provider fees are going … and whether the fees are too much.
Firms like Illinois-based Clark Consulting are being hired to break down the fees, from whether there are revenue-sharing arrangements to commissions to individual brokers. According to several companies, the going rate for running a 401(k) runs about $150 per participant. Any higher than that and companies are likely getting a raw deal to pay off brokers and other vendors.
Consultancy group Hewitt Associates ran a study last year that said 70 percent of all small businesses are “deeply” concerned about the fees they pay. Typically, the concerns show up in A share and annuity wrap programs.