Any article that states that revenue sharing has been declining in 401(k) plans is stating the obvious. Like with a dying business or organization, you can see it a mile away. Revenue sharing has been dying since the day that the Department of Labor (DOL) implemented fee disclosure regulations.<\/p>\n\n\n\n
While people point out that the end was a result of so many class-action lawsuits especially the ABB\/Fidelity lawsuit, I believe that fee disclosures killed it. The reason I think it killed it, was because fee disclosure finally lifted the veil on a big secret, how much certain third-party administrators (TPAs) pocketed in revenue sharing. I grew up in the business when TPAs would tell plan sponsors that using exchange-traded funds or index funds was more expensive because they ignored the costs of revenue sharing and the expense ratios of revenue sharing paying funds.<\/p>\n\n\n\n
Revenue sharing payments will never be fully eliminated, but I believe it will be the 8 track tape of the retirement business.<\/p>\n
<\/span><\/p>","protected":false},"excerpt":{"rendered":" Any article that states that revenue sharing has been declining in 401(k) plans is stating the obvious. Like with a dying business or organization, you can see it a mile away. Revenue sharing has been dying since the day that … Continue reading