If you received an email regarding our annual account fee update, this guide can help you understand what’s changing and how this may impact your account.
The pricing change discussed throughout only applies to plans and participants that received an email notification from Guideline with the email subject line “Your annual 401(k) account fee is changing” or “Your employees' annual 401(k) account fee is changing.”
What is changing?
The annual account fee paid to Guideline Investments, LLC for applicable 401(k) plans will change from our legacy pricing of 0.08% to 0.15% on assets under management (AUM). No other employee or employer fees will be impacted.¹
We’re happy to share that with this change, Guideline Investments, LLC remains one of the most affordable providers on the market.²
Are any new features coming?
We are committed to helping everyone arrive at a secure retirement. Be on the lookout for new upcoming features aimed at enhancing our saver experience, including after-tax savings, mega backdoor Roth, and expanded investment funds and vehicles.
When will this pricing change go into effect?
The pricing change will go into effect on a rolling basis starting in May 2025. The exact day that will apply to your plan will be outlined in the email notification you receive.
We want this transition to be as smooth as possible for all of our customers. That’s why we’re committed to giving ample notice before these updates occur. All impacted plan sponsors and participants will receive email notifications at least 30 days in advance of the pricing change.
What does the annual account fee cover?
Some retirement providers charge participants various fees for investing-related expenses, such as investment management fees, 12b-1 fees, sub-transfer agent fees, contract charges, wrap and advisor fees, and other asset-based charges. These fees cost participants an average of 1.37% of assets annually.
With Guideline, we keep fees simple and transparent. The annual account fee covers all Guideline investment advisory-related expenses.¹ Combined with our low fund fees, our investment costs are up to 6x lower than the industry average.²
How is the annual account fee calculated?
Your annual account fee is calculated and deducted on a monthly basis, based on your balance on the last day of the calendar month.
To determine your account fee for a given month, divide your annual account fee (as a decimal) by 12 (the number of months in a year) to determine your monthly account fee. Then, multiply your month-end balance by your monthly fee.
For example: If your account fee is 0.15% (0.0015), and you have a balance of $10,000 in your 401(k), then your account fee for the month would be $1.25.³
Do I need to take any action?
There’s no action required for Guideline Pro firms, plan sponsors, or participants. If you’d like to learn more about our fees, feel free to view the Guideline Investments, LLC Form ADV 2A Brochure. Plan sponsors can also review their updated Service Agreement Amendment in their Resource Library when the plan’s pricing is updated.
Where can participants view account fees?
Participants can view their monthly account fees within the Guideline participant dashboard.
From our website: Click on Transactions from the main menu.
From our mobile app: Scroll down to the Recent transactions section on the Home screen, then click “View all transactions” to see more.
Your account fees are listed within the report based on the dates they are processed. You can learn more about Guideline 401(k) fees here or in Guideline Investments, LLC Form ADV 2A Brochure.
I no longer contribute to an account with Guideline, why did I receive a notice about pricing?
The annual account fee applies to all assets under management within Guideline 401(k) plans. If you are no longer contributing to a Guideline plan, but still have funds invested in your account, then these fees will apply to your balance.
If you would like to withdraw or roll your balance over to a new account, please review our rollover and distribution guide here.
Can employers cover AUM fees for employees?
We currently allow flexible pricing options for participant and AUM fees in our Enterprise tier. Employers who are interested in learning more about these arrangements can contact our Sponsor Support team to learn more. Soon, we will also be rolling out the capability for plan sponsors to cover AUM for participants in our Core tier, as well.
¹ The annual account fee is charged by Guideline Investments, LLC and is separate and exclusive of 3rd party Advisory Fee charges if working with a financial advisor.
² The average investment expense of plan assets for 401(k) plans with 25 participants and $250,000 in assets is 1.37% of assets, according to the 24th Edition of the 401k Averages Book, with data updated through September 30, 2023, and is inclusive of investment management fees, fund expense ratios, 12b-1 fees, sub-transfer agent fees, contract charges, wrap and advisor fees or any other asset based charges. Investment advisory services for Guideline’s 401(k) product (when 3(38) fiduciary services are appointed) and SEP IRA/IRA products are offered by Guideline Investments, LLC, an SEC-registered investment adviser. The managed portfolios have blended expense ratios ranging from 0.067% to 0.069% of assets under management. When combined with an assumed account fee of 0.15% charged by Guideline Investments, LLC, the estimated total AUM fees for one of the managed portfolios can be under 0.22%. See the Form ADV 2A Brochure for more information regarding fees. Expense ratios for custom portfolios will vary. These expense ratios are subject to change by and paid to the fund(s). View full fund lineup.
³This information is for illustrative purposes only and does not represent the actual costs you may incur as a Guideline client.