Key Questions for 401(k) Participants

Unitized accounts: If a 401(k) investment committee has more than $25 million dollars in one particular investment option, has a cost comparison been made to determine whether a unitized separately managed account would be more advantageous than a mutual fund?

Load vs. no-load: Is the client receiving comprehensive and continuous investment advice from an investment adviser? If so, has the adviser implemented any of the client's investment decisions with a load product? If so, can the adviser demonstrate that the load product, as opposed to a comparable no-load product, was in the best interests of the client?

Mutual funds vs. separate accounts: Has the client been informed of the pros and cons of both mutual funds and separate accounts, particularly the fees and expenses associated with both?

Passive vs. active management: Has the client been informed of the pros and cons of both passive and active management, particularly the fees and expenses associated with both?

Share class: If the client's investment strategy is being implemented with mutual funds, has the most advantageous share class for the client been selected?

Source: Center for Fiduciary Services report, "You Deserve To Be Fairly Compensated -- But Not More So," April 2002.

>To order reprints of this article, click here: Reprints