hello, have a question on what to consider if allowing company to manage
401k funds or pick a self-administered brokerage arrangement and manage myself the 401k fundsbackground: have worked for company over 20 years and their 401k management (the internal vs. outsourced management) has gone through multiple hands and multiple companies. in all this time, the funds have grown between 5-12% every year, amounting to about 500k
now company has announced a major change in how they match funds, how much can be invested into each of the categories and also the option to choose a self-directed brokerage account where you would pay for each trade but it's all under your own control
the difference of course is that the company managed (or the outsourced management for the company) has access to institutional funds where an individual would not have access but they also charge very high fees from the funds, often 1.0 to 1.5 percent and I think I may be able to pick mutual funds that would charge only 0.5 percent or less and maintain same diversity
some examples of the funds are various SSgA funds, Boston Company domestic and International funds and pools of these (blends of various funds)
of course I can just park the 500k into a money market type also but I have to make a pick to allow them to manage it for me (and pay 1.5 percent or more) or pay per transaction but pay much less if I self-manage