401(k) plan/investment fees: Are they the expense ratios, or something else as well?

Asked by: Andrea Rose

Like mutual funds and ETFs, 401(k) plans have fees that are expressed as an expense ratio. The average 401(k) expense ratio is 1%, but it can be higher or lower depending on the size of the plan and the investments offered.

What are the fees that are associated with a 401 K plan?

Typically, 401(k) plans have three types of fees: Investment fees, administrative fees, and fiduciary and consulting fees. Some of these 401(k) fees are charged at a plan level for the management and administration of a plan, while others are related to the investments made by employees within the plan.

Why does my 401k charge fees?

These are ongoing charges for managing the assets of the investment fund. They are generally stated as a percentage of the amount of assets invested in the fund. Sometimes management fees may be used to cover administrative expenses.

What fees are associated with investing?

Here are the six types of investment fees to ask about.

  • Expense Ratio or Internal Expenses. It costs money to put together a mutual fund. …
  • Investment Management Fees or Investment Advisory Fees. …
  • Transaction Fee. …
  • Front-End Load. …
  • Back-End Load or Surrender Charge. …
  • Annual Account Fee or Custodian Fee.

What is the average 401k advisor fee?

401(k) Financial Advisor Fees – A Study of 860 Plans

Plan Asset Range $0-$500k (416 plans) $500k-$1M (158 plans)
Average Participants 13 24
Range 0.02% – 9.36% 0.16% – 2.00%
Average 0.70% 0.67%
Median 0.50% 0.65%

How can I avoid 401k fees?

Here’s how to avoid 401(k) fees and penalties:

  1. Avoid the 401(k) early withdrawal penalty.
  2. Shop around for low-cost funds.
  3. Read your 401(k) fee disclosure statement.
  4. Don’t leave a job before you vest in the 401(k) plan.
  5. Directly roll over your 401(k) to a new account.
  6. Compare 401(k) loans to other borrowing options.

What fees does Fidelity charge for 401k?

While their per-capita admin fee was below the $422.30 average in our 2018 401(k) fee study, that number can easily grow much higher due to the way these fees are charged.
What are Average Fidelity 401(k) Fees?

Average Fidelity 401(k) Fees
Avg. Plan Assets $4,007,011.94
Per-Capita Admin Fees $309.63
All-In Fees 0.71%

Does Fidelity have hidden fees?

The good news is that the bait — Fidelity Zero Total Market Index Fund and Fidelity Zero International Index Fund — is as advertised: There are no hidden fees, and costs are not simply waived temporarily.