An investment advisory firm that failed to property prepare clients for additional transaction costs beyond wrap fees
paid to cover the cost of several bundled services;
Smaller plans are more likely to use an insurance company for record keeping because they are more likely to pay fees through pooled separate accounts, investment expense ratios, and wrap fees
As the district reviewed plan administration, it noticed that the fees on the annuities were high-nearly all of those products were subject to wrap fees
, and participants faced surrender charges if they wanted to transfer their money to another vendor.
The SEC also says that it will focus on fees charged by dually-registered advisors, including wrap fees
Unfortunately, too many organizations have no idea there can be as many as 17 different fees from administrative and transactional to revenue sharing, surrender and wrap fees
at 2-12% par fee simply devouring their employees' retirement funds.
The expenses most people don't know about fall under five categories: asset charges, wrap fees
, mortality expenses, fund expenses and investment management fees.
Require plan-provider responsibility for an appropriate mix of funds and elimination of expensive insurance wrap fees
and required proprietary investment funds.
The Securities and Exchange Commission today announced an enforcement action against an investment advisory firm that failed to properly prepare clients for additional transaction costs beyond the wrap fees
they pay to cover the cost of several services bundled together.
Going into the credit crisis, wrap fees
were in the range of 8 to 10 basis points [bps] [per year], and, as it unwound, some wrap contract providers gained a more full understanding of the potential risks of these strategies and withdrew from the business," observes Pete Schmit, a research consultant in the Chicago offices of Towers Watson.
In addition, private letter ruling 201104061 affirmed that wrap fees
and investment advisory fees for IRAs that are paid with outside taxable funds to the manager or trustee are deductible.
Adviser-run plans are more likely to have participants pay administrative costs directly, through revenue-sharing or wrap fees
ASPA also is recommending that the retirement plan participant statement disclose any indirect costs, such as wrap fees
, compliance costs or administration fees.