I find this to be expensive. I need a 401k for a small company. They purchase shares of underlying mutual fund. Apparently you purchase in units and not the mutual fund. Is this UIT or an annuity?
2007-10-31 02:49:56 · 3 answers · asked by Sixthofseven 1 in Business & Finance ➔ Investing
It is expensive. And yes it is an annuity product. There are plenty of low cost 401k providers out there. Rather than talk to a financial adivisor I would do a search on 401(k) administrators in your area. Most financial advisors will steer you towards an investment option that pays them rather than one that works for you. A genuine TPA will ask you what YOU want to invest in as they have no vested interest in where the money resides.
I know you can find 401k plans and TPAs for about 1.5k +1.5% of assets per year. And that includes the financial advisor AND the mutual fund fees. Trick is to find one that has a platform that allows you to purchase institutional class funds. The financial advisor gets .75%, the recordkeeper gets .5% and the assets are American Fund and Vanguard Funds so expense ratios are .25%. That 1.5k goes to the TPA who also keeps records and facilitates the payrolls, distributions, loans, and keeps the plan compliant with the IRS.
2007-10-31 04:37:10 · answer #1 · answered by digdowndeepnseattle 6 · 0⤊ 0⤋
It sounds like an annuity. Annuities can sometimes be more expensive than mutual funds and aren't always what a person wants when they think of a retirement account.
If you are fuzzy on what to do, you really should talk to a financial advisor (obviously a trusted one) and discuss your options. The general information can be overwhelming when researching on your own.
Ron, ChFC
Investment Advisor
2007-10-31 03:04:29 · answer #2 · answered by Anonymous · 1⤊ 0⤋
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2015-02-05 03:45:15 · answer #3 · answered by Arly 1 · 0⤊ 0⤋