What are investment fees?
Updated over a week ago

The Department of Labor divides 401(k) fees into 3 main categories:

Investment fees

Investment fees typically account for the largest share of 401(k) fees overall.
These costs cover any investment-related services. Usually, these are charged as a percentage of assets.

Administration fees

Administration fees cover general 401(k) management, such as day-to-day administration, record keeping, reporting, and compliance testing. These costs are often charged as a flat rate per participant or a percentage of assets under management. While employers will sometimes cover these costs on employees’ behalf, they can pass some onto the plan participants.

Individual service fees

401(k) providers often charge participants for various one-off services, like distributing funds, processing a 401(k) loan, or processing a Qualified Domestic Relations Order.

What fees does Guideline charge participants?

At Guideline, participating employees pay an account fee called an asset under management (AUM) fee that typically ranges between 0.08% and 0.35% of their account balance. The exact amount charged depends on the pricing plan chosen by their employer. Additionally, our managed portfolios have a blended average mutual fund expense ratio under 0.07%. The expense ratio is not charged by Guideline, but instead by the managers that operate the funds.

When combined, the total fees for our managed portfolios are about 10x less than the industry average, helping participants keep more of their retirement savings.*

Additionally, we do not charge individual service fees, including, but not limited to rollover fees, distribution fees, loan application fees, loan maintenance fees, QDRO fees, check stop payment fees, or expedited mail fees.

You can learn more about Guideline’s 401(k) fees here or in our Form ADV 2A Brochure.

* Guideline’s managed portfolios have blended expense ratios ranging from 0.064% to 0.067% of assets under management. When combined with an assumed 0.08% account fee, the estimated total AUM fees for one of Guideline’s managed portfolios can be under 0.15%. Alternative account fee pricing is available ranging from 0.08% to 0.35%. See our 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 here.

The average investment expense of plan assets for 401(k) plans with 25 participants and $250,000 in assets is 1.60% of assets, according to the 23rd Edition of the 401k Averages Book. Data is updated through September 30, 2022, 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.

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