Great West Launches Fee Disclosure Template

“Current regulation does not require disclosure of two types of fees,” Nelson told AdvisorOne. “One is the insurance company general account which is the fixed investment option in a 401(k). The other is the self-directed brokerage fee. We feel that all those fees, like every other fee, should be disclosed to the plan sponsor. We continue to work with non-affiliated organizations and certain self-directed providers to encourage them to provide that type of disclosure.”

Many successful service-based firms like doctors’, lawyers’ and dentists’ practices utilize self-directed brokerage options in their 401(k)s, Nelson said. Without disclosure of those self-directed fees, they’re not getting full disclosure.

DALBAR Inc. provides independent third-party certification on the template, according to Nelson. “Plans may hire a consultant to verify that their plan meets the new requirements,” he said. “However, the reviewer often has a previous relationship with the plan. In contrast, DALBAR is an independent third party that doesn’t have a vested interest in the evaluation. This gives plan fiduciaries additional comfort knowing that the template provides them the information they need to meet their plan fiduciary responsibilities.”