What Should You Pay for Financial Services? 9 Answers
What they cost: Total fees on 401(k) retirement plans average 0.35% of assets for plans with more than $1 billion in assets, according to Brightscope. Plans with less than $50 million have average fees of 0.94%.
Why: Employees are charged for two services. First, there’s the cost of running the plan — administrative expenses, paperwork, marketing, mailings. Second, there are the costs of managing investments, usually through mutual funds.
Investors who choose low-fee index funds often avoid "revenue-sharing" fees. Those charges are included in pricier funds' expense ratios but actually help cover the retirement plan's administrative costs.