Everyone has been focused on fees since the implementation of fee disclosure in 2012. It didn\u2019t end retirement plans for everyone, but it put pressure on fees.<\/p>\n
While the focus on fees have affected those providers that do more for less (third party administrators), they have also put pressure on advisors who are now doing work that they used to get paid double just a few years ago.<\/p>\n
While those administration and advisory fees have been pressured, I still think that mutual fund management expenses are still where to focus. I\u2019m not a psychic, but I think that revenue sharing fees that are paid by mutual funds that tend to be more expensive than those who don\u2019t is where the problems lie. I\u2019ve never been a big fan of revenue sharing and never will. Maybe it’s because revenue sharing looks like some sort of legal kickback and something resembling payola.<\/p>\n
The reason I\u2019m concerned about revenue sharing because I know ERISA litigators are targeting plans out there that have them and have used revenue sharing as a reason why they select certain mutual funds. It\u2019s my opinion and my opinion only that revenue sharing will end at a certain point. It\u2019s too much grief for plan sponsors, advisors, third party administrators, and mutual fund companies as well. Mutual funds can simply replace revenue sharing by just cutting investment expenses in the same amount of revenue sharing.<\/p>\n
I\u2019ve been wrong before (I thought Apple Stores were a bad ides), but I have a better track record in retirement plan marketplace opinions.<\/p>\n
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