Deals & People May 30, 2012

LPL and Retirement Benefits Group Add Five Advisers

Matthew Haerr, Christine Soscia, Amir Arbabi, Peter Littlejohn and William Brown were hired as retirement plan consultants by LPL Financial LLC and Retirement Benefits Group.

 

 

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The advisers will provide retirement guidance to institutional clients in plan design assistance, compliance updates and investment due diligence, as well as participant communication and education. 

Haerr has more than 20 years of advisory experience. He has worked with company-sponsored retirement plans, family and personal wealth management, and personal retirement planning, helping to develop strategies for 401(k), profit sharing and pension plans.

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Soscia has been in financial services for more than 15 years. She has helped design, audit and implement employee benefit programs. Soscia also has experience in strategic tax planning, wealth management, business planning, estate planning and succession planning. Soscia was among the first to graduate from the 401(k) Coach program in 2004. In 2006, she purchased a third-party administrative firm and managed more than 160 plans. She has made appearances on CNBC and Fox Business. Soscia holds Series 63, 7, 24, and 66 registrations with LPL Financial, and Life and Health licenses, and is a founding member of the Professional Business Advisor group in Las Vegas.

Arbabi assists with plan design, fiduciary oversight and investment due diligence. He has expertise in wealth and investment management. He has previously held positions at Merrill Lynch and Morgan Stanley Smith Barney.

Littlejohn joined the Retirement Benefits Group as the practice leader in Akron, Ohio. He has more than 27 years of experience, most recently at Highmark Capital Management in San Francisco, where he led the DCIO advisory business beginning in 2009. Earlier he led retirement businesses at Ivy Funds, Wells Fargo, Strong Capital Management, and Cigna Retirement and Investment Services, where he was responsible for sales, marketing, client service and strategic development.

Brown joined the Retirement Benefits Group in the Idaho Falls, Idaho, office and was previously with Morgan Stanley Smith Barney.

 

Data & Research May 30, 2012

Retirement Plan Fees Consume 30% of Returns

Plan fees account for nearly one-third of an investor’s potential returns, a paper found.
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A two-income household, in which both partners earn the median income each year over their working lifetimes, will pay an average of $154,794 in 401(k) fees and lost returns, according to the fee model in “The Retirement Savings Drain,” by the research group Demos. A higher-income dual-earner household, in which the partners earn incomes greater than three-quarters of Americans each year, can expect to pay an even steeper price: as much as $277,969.  

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Demos found the median expense ratio of mutual funds in 401(k) plans was 1.27% in 2010. Trading costs vary from year to year, but have been estimated to average approximately 1.2% per year as well.  

The average mutual fund earns 7%, before fees, matching the average return of the overall stock market, Demos found. However, the post-fee returns average only 4.5%, meaning that, on average, fees eat up more than a third of the total returns earned by mutual funds.   

Smaller 401(k) plans have higher average fees than do larger ones. The median expense ratio for plans with fewer than 100 participants was 1.29%, while in plans with more than 10,000 participants, it was 0.43%.  

The paper can be downloaded here.

 

 

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