Industry Insight from Fred Barstein
2008 401kExchange Micro Market Ratings

WITH GROWING CONCERN about the viability and trustworthiness of traditional financial service organizations, especially banks, it is no surprise that CUNA Mutual which services and is owned by credit unions, was top rated in both the  Micro Market and the Small Market plans.  Additional top rated providers include national names like Vanguard, Schwab, Principal, Wachovia, John Hancock, Prudential, Oppenheimer and Lincoln, along with lesser known regional record keeping TPA’s including Pai, Alliance Benefit Group and TPA associates.

While it has been hard to make money with smaller plans in the past, especially for national providers with expensive sales forces charging mostly asset based fees, it will only get that much more difficult with greater fee disclosure.  Though final 408(b)(2) regs have been delayed with the transition to the Obama administration, no one doubts that more extensive fee disclosure is coming which will benefit local record keeping TPA’s and providers that rely less on asset based charges, like Ascensus and CPI.  With sophisticated advisors looking to capture rollovers and other employee benefits taking over more Micro plans, there will be a greater awareness of excessive fees and a move to more open investment platforms.

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