His firm talks to plan sponsors about the importance of benchmarking their fees and encourages them to discuss benchmarking performance at committee meetings. Whether your plan is benchmarking in the top or bottom quartile or decile, "all vendors are in negotiating mode these days," he says.

Brian Gregov, senior manager of AEPG's retirement planning division, stresses the importance of helping clients look at the numbers now. "You can't count on the vendor to interpret the fees and put it in perspective," he says. "Financial advisors should act as advocates with vendors."

Gregov says plan sponsors should understand their plans' record-keeping and administrative costs (bundled or unbundled) and every investment expense. They also need to understand their advisor costs to make sure they're leveraging the services being provided, he says.

Advisors can also help plan sponsors get in front of their participants to tell them what fees they can expect to see, including the costs associated with taking a loan or distribution. If the sponsor pays the advisory fees-which not many do-it should let participants know, says Kaye.

Don't be afraid to ask vendors for a reduction in fees or ask if they can throw in additional tools and services or greater communication efforts, Gregov and Kaye suggest. Also, find out whether vendors need to be compensated in basis points or on a flat fee per head, which they say controls costs better. Over the past year or two, they've noticed that record-keepers/third-party administrators have been increasing their use of the latter method with smaller plans, not just larger ones. Most plans should also ask for the lowest cost share class whenever possible, they say.

Kaye and Gregov expect to see further fee compression at both the vendor and advisor level.

Better Reception
Mike Lissner, a partner with Acropolis Investment Management LLC, a fee-only wealth management firm in St. Louis, is also excited by the new fee-disclosure rules. "This is a net benefit for the guy who works for an RIA," says Lissner, who thinks it will be easier to attract clients.

Acropolis manages about 25 401(k) plans with a combined $100 million in assets-12% to 15% of the firm's total assets under management. It has always been fully transparent on its private client and 401(k) sides and will only work with plan providers who are also fully transparent. But that approach often hasn't been easy to sell.

"Before we knew that transparency was coming, it was a difficult conversation," he says. "Plan trustees and sponsors didn't realize the fees were there, and we felt it would be difficult to compete when the person we were competing against said it was free."

Lissner also expects the new rules will ultimately save people money in retirement. He anticipates more fee compression and thinks the majority of plans will move to new providers over the next handful of years amid industry consolidation. He also expects to see better service as providers work harder to justify their fees. "Too many people are taking money out of the pie, and a lot of that fat will be stripped," he says.