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Why You Should Fire Your Advisor, TPA, and Plan Administrator

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With the recent Department of Labor disclosure rule, insurance companies are scrambling to calm the storm that is about brew. If you thought the banks were horrible with their fees, wait and see till you see your 401k statement.

There are many large and small plans that have fees that are excessive, and either your plan administrator chose to ignore them (probably because their golfing buddy is the advisor), or your greedy advisor forgot to mention the hidden fees. TPAs or third party administrators should also be included. They like to be the innocent bystanders, but they know enough about plans to tell you.

The typical response from a plan administrator, CFO, or executives who know little about 401ks is,”We know what we pay”. That could be further from the truth. Once a company starts a 401k it becomes a right of the employees, and not a benefit. Executives ignore the fact that they are fiduciaries of the plan and personally responsible for the well being of it – that means making sure that the plan is well priced and consistent investment advice is given.

Don’t believe me? Talk to Southern California Edison, Catepillar, and other major companies that have class action lawsuits against them for faulty 401ks.

Employees have the right to know what they pay. Too many insurance companies, and advisors have taken advantage of high fees for too long.

 


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