Broker Check

Leppla Capital Management vs. Traditional 401(k) Providers

The LCM Difference

Most traditional 401(k) plans are characterized by hidden and excessive fees, underperforming investments, and fundamentally misaligned incentives between the client and vendor.

You know this isn’t right, but there hasn’t been a better alternative. Until now.

You want a low-cost, easy-to-administer 401(k) plan that gives employees a comfortable, secure retirement and opportunities for financial education as they work through their careers.

Your employees want the same – to feel secure and confident in their investment decisions, a trusted partner to help navigate the financial maze, and access to excellent products at fair prices.

Your traditional vendor has one interest: profit. Often, at your expense.

How much is your provider really making off your dime?

Most 401(k) plans are sold on the basis of the “stated plan cost,” typically a percentage of the total assets in the plan. For example, a company with a $3 million 401(k) plan may pay 0.8% per year for their 401(k) plan, or $24,000 annually. But this isn’t all your provider is paid.

Most vendors sell you 3rd party products and receive a percentage of the fees you and your employees are paying for those services, on top of the fees they get directly from you. What’s the big deal? First, your plan is more expensive than it should be. Second, your vendor is more motivated by 3rd party vendors with high revenue sharing percentages than making wise investment decisions.

Here’s just a glimpse of the hidden and confusing fees you may be paying today:

TPA takeover fee
Transfer fee
Plan termination fee
Installment payment set-up fee
Loan maintenance fee
Additional plans fees and/or extra services fees

Is your current provider taking fiduciary responsibility?

Many providers refuse to undertake The Employee Retirement Income Security Act (ERISA)’s mandated fiduciary responsibilities, and instead use the “fine print” to put the duties solely on you. Why? They want the freedom to profit off your invested dime and engage in conflicts of interest with you.

Here are a few ways traditional providers turn a profit on your investment:

Revenue sharing from investment funds
Fee waivers/ reimbursements paid
Cost of capital charges
Sub-advisor fees
Advisor margin and securities lending fees
Annual marketing or distribution fees (12B-1 fees)
Interest spread
Surrender charges

LCM is different.

We don’t accept revenue sharing, “soft dollar” arrangements or other financial inducements that are not in your best interests. With LCM, you get the nation’s best investment products and you know exactly what you’re paying for.