posted on March 28th 2018 in WorthPointe News with 0 Comments /

“Beware that you do not lose the substance by grasping at the shadow.” — Aesop


A recent survey conducted by TD Ameritrade revealed just how little people know about the fees they pay for their 401(k) plans. The survey of 1,000 investors found only 27 percent of them know their 401(k) fees.


Ironically enough, the survey found a whopping 96 percent know exactly how much they pay for entertainment services such as Netflix, Spotify, and Hulu.


This is an interesting observation and although the media and some 401(k) providers including WorthPointe have emphasized lower fees, that is not enough. Correct portfolio construction is essential in overcoming and hopefully exceeding the drag on fees — and most plan sponsors and 401(k) providers put little thought into this.


The New 401(k) by WorthPointe uniquely solves both issues.  We’ve become a leader in the market in providing lower cost 401(k) services and institutional no-load investments as well as the critical and under-delivered service of providing professionally managed portfolios for every 401(k) and pension plan participant.


If you’re going to buy a car and focus on price only, you will most likely end up with a junker that will get you nowhere. In the investment world, focusing only on fees is akin to grasping at shadows and thus losing the substance. The real substance of creating wealth with diversified portfolios is precise portfolio construction with the correct exposure to factors and components that over time have been shown to historically outperform conventional benchmarks.


Time and competency is also at play here, as we know most participants have neither the time nor the wherewithal to invest as effectively as they should, especially with the myriad of options they’re confronted with. That’s why The New 401(k) by WorthPointe is such a unique solution; it doesn’t just dump the confusing task of portfolio management onto the retirement plan participant, but professionally manages each participant portfolio — something that can reduce the fiduciary liability for business owners and plan sponsors.


The New 401(k): lower fees, professionally managed portfolios, the gold standard for 401(k) and pension plans.


For more information on The New 401(k) by WorthPointe and to get a second opinion, visit here.

about the author: Morgan H. Smith Jr. IMBA CFP®

Morgan Smith Jr. IMBA, CFPMorgan H. Smith Jr. IMBA CFP, who has been a fee-only financial planner for over 12 years, specializes in wealth management for successful families, business owners, retirement plans and institutions requiring a disciplined fiduciary process.

An Assistant Professor at the University of San Diego, Morgan has been a frequent speaker to many professional organizations and has appeared on CNBC, Fox Business New Live and is a founding member of the Strategic Trusted Advisors Roundtable.

Learn More and/or Contact Morgan

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