Experts said the increased focus on fees should benefit workers. "The fee disclosure regulations may very well turn out to be the most important change in the history of the 401(k) plan," said Mike Alfred, chief executive of retirement-plan research firm BrightScope Inc., in San Diego. Workers enrolled in plans "are likely to win big," he said.
401(k) Plans Step Into the Sunshine
January 27, 2012
Size up your 401(k) at Brightscope.com, which has detailed ratings for hundreds of 401(k) plans that takes cost, company match, and fund investment options into account. If you confirm you’ve got a laggard on your hands, by all means harp loud and clear to H.R. that you deserve better options. But even the best-case scenario – that is, they listen! – will take time.
4 Ways to Fix a Lousy 401(k)
January 26, 2012
Costs charged by plan providers vary by asset size and number of participants. But Vanguard offers up this example: The all-in cost for a plan with $5 million in assets, an average account balance of $50,000, and an investment lineup of Vanguard index and active funds would be 0.32 percent. By comparison, the
industrywide average total plan cost for plans with less than $5 million is 2.09 percent, according to Brightscope, which analyzes 401k plan performance and trends.
Low-cost entries shake up small retirement plan market
January 19, 2012
In more bad news, many advisers and retirement plans are eschewing actively managed funds, a hallmark for American Funds, in favor of index funds. In 2011, investors pulled about $9.4 billion from actively managed funds, while index funds took in $76.4 billion.
In 2010, 14 401(k) plans with more than $1 billion in assets under management dropped Growth Fund of America from their plans, while only three added it, according to research firm BrightScope.
Analysis: Resisting change, American Funds faces more losses
"Do your research to determine what fees would be reasonable for a plan of your size," Hobson says. "A great consumer resource to compare plans is BrightScope; specific plan fees aren't available, but you can see how your plan rates compare to others. Once you are armed with information, you can approach your plan sponsor to have a discussion about your plan. There is also a nice checklist on the Labor Department website that you can bring to your discussion."
What to Look for in Your New 401(k) Report
January 18, 2012
But times have changed. For one thing, transparency has come to retirement benefits. Research service BrightScope Inc. in recent years has allowed employees to compare the generosity, quality and cost of different companies' 401(k) plans.
The Rising Price of a Cheap Retirement Plan
January 18, 2012
As employers prepare for new federal rules requiring them to explain how fees affect 401(k) returns, industry providers are rolling out better, lower-cost plans.
The Department of Labor rule "is a big driver of change," says Mike Alfred, CEO of BrightScope, a provider of independent retirement plan ratings and investment research. "Everyone recognizes that fees will be under the microscope."
The new plans are aimed at helping small and midsize employers, which in the past have been unable to offer their workers the lowest-cost plans. Their workers make up 43% of all plan participants, according to BrightScope.
Options for 401(k) plans get more affordable
January 16, 2012
Companies on the list are continuing such trends as improving participation rates, increasing employer matches and lowering total plan costs, says Mike Alfred, BrightScope's co-founder and CEO. For employers, high participation translates into employee loyalty and high retention.
Seven new entrants made the list, bumping companies that had appeared on it since the list's inception in 2009.
IBM dropped 10 spots to No. 22. Alfred says the plan was identical to 2010 but was edged out by newcomers like Google Inc., which hadn't been considered in previous rankings because the search engine giant's plan hadn't yet reached $1 billion in assets.
The scrutiny comes at a time when more advisers are using social media sites to build their brands, find potential clients and communicate with existing ones. About 47% of advisers used social media for their businesses in 2011, up from 35% in 2009, according to a survey by Aite Group, a research and advisory firm for the financial services industry. "The world is going toward more communication through social-media sites," says Mike Alfred, co-founder and chief executive officer of BrightScope, a firm that provides online records of financial professionals.
Is Your Broker Tweeting Lies?
January 12, 2012
Online directories: The National Association of Personal Financial Advisors offers an online directory that can be searched by ZIP code and then refined by more than two dozen criteria. Similar searchable databases are available from The Certified Financial Planner Board of Standards and Brightscope Advisor Pages.
6 Steps to Hiring a Financial Planner
January 11, 2012
Fee reckoning time is nigh
Schwab’s new product offering "is absolutely part of an overall trend of providers trying to rationalize their pricing for a post-fee-disclosure world," said Mike Alfred, co-founder and chief executive of 401(k) ratings firm BrightScope Inc. "Nobody wants to be the last one to roll out ETFs or index products."
The good news for retirement savers is that "fees are being compressed across the whole industry," Alfred said. The average total plan cost for plans in BrightScope's annual list of "Top 30 401(k)s" dropped five basis points, to 0.61%. Keep in mind that “"low cost" is among the criteria to get on that list.
New 401(k) focuses on index mutual funds
January 10, 2012
If the department caves to industry pressure and postpones the April 1 deadline, it presumably would have to push back the date when employers are supposed to provide disclosures to employees as well.
"It certainly would be difficult for a plan sponsor (employer) to answer questions from confused or angry employees if they don't even know how much their employees are paying," says Mike Alfred, chief executive of Brightscope.com, which rates 401(k) and 403(b) plans.
Fees lower?
Alfred says the good news is that fees appear to be coming down in anticipation of the new rules. A delay in the implementation date would give providers and employers more time to reduce fees before employees see what they have been paying.
"A lot of employers have been negligent" in monitoring fees, Alfred says. "The fee disclosure will put that on display for everyone to see."
New requirement on 401(k) fees might be delayed
January 9, 2012
Of course, those who earn big salaries are more likely to have big balances in their 401(k), says Mike Alfred, CEO of Brightscope, which monitors and rates retirement plans. And the recession not only wiped out many 401(k) balances, but its fallout has hampered saving -- particularly among the middle class, he says. "There are a lot of families who have to simply stop saving because of a job loss or major health-care issue," he says.
And top of that, most participants can't -- or don't -- take advantage of their 401(k), says Alfred. Advisers recommend savers max out their 401(k) contributions. But while the IRS raised the cap $500 to $17,000 for 2012, just 9% contribute that much, according to EBRI.
Secrets of the 401(k) Millionaires
January 7, 2012
You're likely wondering, "So, what's a civic startup?"...
...Then there's Brightscope that will let you compare your 401K options using federal data they literally petitioned Congress to open up.
Accelerating San Francisco
January 5, 2012
BrightScope, Inc. co-founder Mike Alfred says his company, which ranks 401(k) plans, is closely monitoring this issue.
Alfred says his company is working closely with Labor Department officials on a number of projects but hasn’t discussed disclosure recently.
Some companies that offer 401(k) investment funds share fee revenue with firms that provide recordkeeping or brokers that sell retirement plans. The amount flowing between funds and their service partners may be more than $5 billion annually, according to BrightScope Inc., a San Diego-based firm that tracks 401(k) data. The Labor Department rules, which may still change, will give employers details on those transactions.
Retirement Fund Fees May Get Squeezed By Disclosure Rules
January 3, 2012
7. Mike and Ryan Alfred, founders, BrightScope, Inc.
Including the Alfred Brothers on this list will no doubt provoke the ire of some RIABiz readers as the San Diego-based entrepreneurs are not without controversy. They first succeeded by publishing reams of information about 401(K) plans on their website. And some advisors didn’t like their system of criticizing the plans. Other said it was a case of wanting to kill the messenger.
In 2011, the Alfreds turned their guns on RIA practices. In April, BrightScope caused an uproar when it launched Advisor Pages, a database of nearly 450,000 advisors with information culled from SEC and FINRA websites presented in user-friendly form.
The 10 most influential figures in the RIA business going into 2012
December 30, 2011
To be an entrepreneur is to break many of the rules of personal finance. It means making a big bet. It can mean a lot of credit card debt, too, as Mike Alfred discovered. He is a co-founder of BrightScope, a company that ranks and provides data on 401(k) plans and investment advisers, and he recently finished paying off about $50,000 of that debt.
It can also mean blowing off retirement savings for a while. Putting away $10,000 a year is fine, but most people in start-ups figure it's best to put all their available cash into the business in the hope they can sell it later for enough to retire on right then and there.
Here, Mr. Alfred diverts from the standard all-in strategy as he recently began saving in his own company’s retirement plan. In one sense, this may be about perceptions — it might not look so good if Mr. 401(k) was not participating in his own retirement plan.
But Mr. Alfred, 30, chalks this up to something else — the fact that his girlfriend moved to San Diego this year so the two could move in together. "When you get older, you may have a spouse or significant other that is more conservative than you," he said. "And you need to make sure that they feel comfortable building a relationship with a risk-taker. It is a little bit of a compromise, and she convinced me to start again."
Footsteps to Follow in the Coming Year
December 29, 2011
But employees do not have to rely on their 401(k) plan manager to get engaged in their account. BrightScope's ratings have allowed plan participants to evaluate their plan against others on criteria such as company generosity, total plan cost and account balances. Launched in 2009, BrightScope's free rankings are based on a review of publicly filed documents. And the rankings have proven to be popular, attracting some 250,000 visitors per month, says Dan Weeks, BrightScope's chief operating officer.
Companies, too, are tapping BrightScope to see how their plans compare against industry peers. BrightScope's corporate business, which includes custom reports with more detail than the free ratings, more than tripled last year, though Weeks declined to give the exact revenue figure or number of clients.
BrightScope executives say their service has acted as a kind of a Yelp-like service for the 401(k) arena, with the transparency helping to reveal the way many plans have been poorly managed. And they expect even more interest in their site and service once a key federal regulation kicks in later in 2012.
The U.S. Labor Department rule requires employers to disclose information about 401(k) plan costs to employees. Given that some 70 percent of plan participants don't even realize they pay fees on their retirement accounts, the disclosures will likely motivate employees to learn more and prompt the creation of new websites about 401(k)s, Weeks suggests.
As far as employer-provided retirement plans go, check out Brightscope.com and compare your company's retirement plan fees with other industry players. Use the comparison to get a better grip on fees that could be robbing your retirement and share the results with your company's management team.
Three Retirement Resolutions for 2012
December 20, 2011
Brightscope, which rates and ranks 401(k)s, released its third annual yearend rating of the 30 best large plans today. The Southwest Airlines pilots' plan took top honors this year, rising two spots compared with last year's list...
For Southwest's pilots, the number-one ranking means their plan "gets average plan participants to retirement faster than any other 401(k) plan in the country," says Bryan Lorenz, Brightscope's vice president of data. "A participation rate of nearly 100 percent as well as the highest combination of company generosity and salary deferrals contributed to this outcome."
List of top retirement plans has Southwest pilots flying high
Retirement would be a lot easier if all companies were as generous as Southwest Airlines is to its pilots.
The airline recently took the top spot on a list of the 30 highest-rated 401(k) plans, a report created by BrightScope, a company that analyzes the plans. Southwest, known more for its quirky corporate culture than its generous 401(k) plan, matches 100 percent of the money its pilots set aside, up to 9.3 percent of their income.
Over all, BrightScope found that companies — at least the giant ones that made the list — were significantly more generous with their employees than last year. The average company provided an average of $11,000 per plan participant in 2011, up from $8,000 last year.
BrightScope's Top-Rated 401(k) Plans for 2011
December 20, 2011
Brightscope on Tuesday released its third annual list of the best 401(k) plans for 2011. These plans have at least $1 billion in assets as reported by plan sponsors and recordkeepers. Brightscope also uses publicly available data from the Department of Labor and the Securities and Exchange Commission in its analysis.
"There is no doubt that access to better evaluation tools and information on retirement plans has had a positive effect on the overall quality of plans available to employees," Mike Alfred, CEO and co-founder of BrightScope, said in a statement. "The average rating of the plans on this year's Top 30 List increased more than 75 basis points over 2010. This tells us that plan sponsors are using data more effectively, conducting better due diligence, and making superior overall decisions."
Top 30 401(k) Plans of 2011
December 20, 2011
Independent consultant BrightScope, which focuses on evaluating investment plans, has released its 2011 rankings of corporate 401(k) programs.
At the top of the list is last year's No. 3-rated plan offered by Southwest Airlines (LUV). The second-ranked plan is by the Saudi Arabian Oil Co. in Houston. At No. 3 is one offered to employees of Boston-based fund manager Wellington followed by consultant Deloitte's profit sharing program.
Top 401(k) Plans In 2011: LUV, AMGN, GS, NVS, IBM, GOOG, XOM
December 20, 2011
Ever wondered how your 401(k) stacks up against the competition?
Not every retirement plan is equal — so you might want to check out yours at BrightScope, a financial information company that on Tuesday put out its top 30 picks.
And, while large companies often have the most efficient plans, "there are plans with $100 million in assets paying less as percentage in fees than billion dollar plans," notes Dan Weeks, founder and chief operating officer of Brightscope, which rates 401(k) plans. Brightscope is working on updates to its website that will help investors interpret the 401(k) fees and benchmark them against the plans of similarly-sized companies and industry peers.
How to benefit from new retirement fee disclosures
December 8, 2011
Employees may not see evidence of these changes until the spring of 2012. But here are some they may already be seeing, and what to do about them.
-- Controlling costs is paramount. Not every employee has access yet to those clear fee reports, but there are some ways to see what you are spending. Workers whose plans are covered by Brightscope can see that information on the Brightscope.com Website. Workers can ask their human resources department for a bottom-line figure.
Stern Advice: Companies shake up 401(k)plans, cut fees
December 6, 2011
We now have more empirical data to support this consensus. Mike Alfred, Co-Founder and CEO of BrightScope, the 401k rating firm located in San Diego, California, tells FiduciaryNews "Large plans are almost always unbundled and typically lower cost due to economies of scale. I don't think bundling is necessarily ever 'better' for anyone other than the service provider. There is a reason why the best mega plans in the country, like IBM and Lockheed Martin, are unbundled."
Should 401k Plan Sponsors Sell Their Souls for One-Stop-Shopping?
December 5, 2011
You also can get information from your state securities regulator.
And a website, BrightScope Advisor Pages, was launched this year. It lets consumers easily search for advisers by city and compare characteristics that are important when shopping for one. And it makes public disclosure data accessible.
The website plans to offer a way to score the many different acronyms that advisers can have. "It's alphabet soup," Alfred says. "Some designations only take two or three hours of study. Things like CFA and CFP are much more rigorous."
Time picking a financial adviser is time well spent
December 4, 2011
In a new ranking of US target date fund families, American Century retains the top slot. Vanguard, previously tied with American Century, slips to fifth place.
The rankings are part of "Popping the Hood IV", a study of 48 target date fund families developed through a partnership between data firms Target Date Analytics (TDA) and BrightScope.
American Century remains on top
December 3, 2011
According to BrightScope, a firm that analyzes retirement accounts, nine plans with more than $1 billion have more than half their assets invested in stable-value funds. At DuPont, stable value makes up approximately 60% of its $8.2 billion in retirement-plan assets. Almost two-thirds of the participants in the plan are 55 or older and invest "with a conservative asset allocation stance," says a spokeswoman.
What Price Stable Returns?
November 28, 2011
If you are a plan sponsor, ask your plan investment advisor for a copy of "Popping the Hood IV," 2011 from Target Date Analytics and BrightScope so that you are in a better position in which to analyze the Target Date Fund offerings.
How Does Your Target Date Fund Stack Up?
November 26, 2011
Financial information firm BrightScope rates thousands of company retirement plans on a scale of zero to 100, including those of the four major TV nets. News Corp.'s Fox plan is at the top of the heap with a score of 78. CBS follows closely in second place with 77. Disney (ABC) comes in at 74, and Comcast (NBC) trails at 71.
News Corp. tops retirement plans
November 22, 2011
But even though the overall trend has been toward owning less company stock, there are still pockets of big ownership within 401(k) plans. For instance, the tracking company BrightScope maintains records of how much workers own in company stock in 401(k)s, and among those with high ownership levels of employer stock are Chesapeake Energy (NYSE: CHK ) at 48%, Procter & Gamble (NYSE: PG ) at 42%, and General Electric (NYSE: GE ) at 41%.
The Worst Stock You Could Ever Buy
November 15, 2011
Of these third-party sites, BrightScope has gained some of the most attention in the past year.
The company had intended to add a section to its Advisor Pages, letting consumers write reviews about advisors — a concept akin to popular consumer websites like Yelp or Tripadvisor.com. The La Jolla, Calif.-based company — well-known for its rating of 401(k) plans — had intended to launch these reviews by the end of this year, but has decided to wait until next year.
The company says is putting off consumer reviews because it wanted to launch a Q&A section on the site first, says co-founder Mike Alfred. When asked by RIABiz if the decision to hold off consumer reviews was prompted by regulatory hurdles, Alfred said that wasn't the case at all....
The average fund with a 2010 target date for retirement lost about 25 percent in 2008. That led to government hearings and significant discussion about whether the funds were properly managed.
The criticism has changed many funds and they're now more conservative in their investment approach, said Brooks Herman, head of research for BrightScope Inc., a provider of investment research and financial data, which recently completed a study of the funds.
Tips for choosing the right target-date fund
November 15, 2011
Does your company's 401(k) stack up against retirement savings plans offered by your competitors? Do your employees pay higher-than-average fees?
You might not know the answers, but BrightScope does. The San Diego startup has rated retirement savings plans at more than 55,000 U.S. employers based on factors such as costs, investment menu quality, "company generosity" and other criteria, and makes its findings available free on its website.
Rating Your 401(k)
November 11, 2011
Measurable progress is being made toward a safer level of diversification. Brightscope reports that 15 percent of all 401(k) plans contained some level of employer stock in 2009 -- down 2 percent from 2007 levels. More encouraging, net assets in plans held in company stock fell 25 percent during that same time period.
Your employer's stock: How much is too much?
November 8, 2011
Some private services now also offer free information about financial advisers. For example, BrightScope, a financial information company, introduced a free service in April that lets investors search for advisers by assets under management, geographic area and other criteria. The company, based in San Diego, gathers information from BrokerCheck and the SEC database, including disciplinary histories, but allows investors to search in different ways. Investors can also use the service to compare advisers.
Six ways to predict your brokerage is about to crash
November 8, 2011
Generally, all-index funds are the best place to start when considering target date portfolios because of their lower cost and better diversification. There are only seven fund groups that offer an all-index line-up within their target date offerings, according to Brightscope.com President Ryan Alfred, whose firm tracks and rates 401(k) plans.
How to identify overpriced target date funds
November 1, 2011
One firm specializing in retirement plan scrutiny is BrightScope, a San Diego-based startup that rates the quality of 401(k) plans at public and private U.S. companies. BrightScope's co-founders recognized that Americans needed better information about their 401(k) plans because the plans had become their primary means of saving for retirement, says Mike Alfred, the firm's co-founder and CEO.
"You could not go online and look up how good a plan was. You couldn't figure out if the match was good," he says. "We thought that was a problem that needed to be fixed."
The 411 on 401(k)s
October 31, 2011
"If there ever was a time when plan sponsors are fee-sensitive, the time is now," said Ryan Alfred, president of BrightScope Inc., a San Diego firm that rates 401(k) plans and 403(b) plans. In a recent study of institutional share classes among target-date fund families, BrightScope said the average fee in 2011 was 0.75%, down from 0.8% in 2008 when his firm conducted a similar review.
"There's room for some more downward pressure, but I don't think we'll see as aggressive cutting (in the future)," said Joshua Charlson, senior mutual fund analyst at Chicago-based Morningstar Inc. "We'll see some reductions, but we won't see the magnitude of the last five years in (the fee cuts of) the next five years."
Target-date fund fee decline likely to continue (REQUIRES SUBSCRIPTION)
October 28, 2011
Much as BrightScope was able to spot inefficiencies in the allocation of taxpayer funds and make a profit from it, the number of areas in which business can build a service based on poorly run or misallocated government spending practices is potentially unlimited. However, this is not necessarily an invitation to privatize government services as much as an opportunity to make better use of them.
Profiting from open data
October 28, 2011
BrightScope Inc. has put on hold plans to launch an online forum where consumers can write reviews about their financial advisors. The financial information company will instead launch a Q&A service where consumers can write in financial questions and Brightscope member registered investment advisors can answer them on the company's website, said Mike Alfred, co-founder and CEO of BrightScope.
"One of the challenges of doing reviews is that they have a compliance paradigm in the financial services industry, which is out of touch with the way the world is going," Alfred said. Consumers use Facebook, LinkedIn and other Web-based services to make decisions about what products and services they want to buy, but regulators "are telling advisors they can’t use those things," he said. "The whole world is moving toward more online interaction and decision making on what people find online, but regulators are saying, you can’t do that."
BrightScope backs away from advisor reviews
October 25, 2011
Dan Weeks, founder of 401(k) information firm BrightScope, thinks the threat of lawsuits may motivate large companies to keep a closer eye on 401(k) fees, but smaller employers probably don't have to worry about class-action suits.
"I hope that the market becomes more transparent through disclosure rather than through litigation," Weeks said.
For workers in calendar-year plans, the first real dollars-and-cents fee disclosure is due by May 31. Weeks hopes workers will turn to the BrightScope website, which rates 401(k) plans, to learn whether they're getting a good deal.
Spotlight on 401(k) fees may help many saving for retirement
October 24, 2011
It's not all a bed of roses, though. For one thing, some 401(k) plans sport high fees, which can wipe out a significant chunk of your earnings. You can check your employer's plan rating at BrightScope.com: Ford (NYSE: F ) and Corning (NYSE: GLW ) , for example, are in the "lowest fees" category. While biopharmaceutical company Geron (Nasdaq: GERN ) gets top marks for the generosity of its matching plan, its fees are only average, and its investment selection is poor. Clearly, the company you keep matters. (This kind of information is also useful to would-be investors, suggesting how well various companies treat and attract employees.)
Just Say No -- and Make More Money
Schlichter says he's filed about a dozen such suits in the past five years, and acknowledges that some have been thrown out. But he's also reached accords in some similar cases, notably against Caterpillar, Bechtel and General Dynamics. "He took a shotgun approach and fired at a lot of big companies," says Mike Alfred, CEO of BrightScope, a firm that monitors and grades 401(k) plans. "Many were dismissed because there was no merit, but clearly some companies were worried and willing to pay $15 million to $20 million to settle."
Employee Lawsuit Highlights 401(k) Fee Issue
October 21, 2011
You may unwittingly be invested in a target date fund. Many employers have been automatically enrolling workers in their 401(k) plans and putting them in a target fund, as the result of a 2006 federal law.
Tha''s the main reason they're growing so fast. Target date funds hold $400 billion in assets now, and will grow to $2 trillion within a decade, according to a newly released report from Brightscope, a company that ranks 401(k) plans, and Target Date Analytics, which tracks target date funds.
Five Reasons I Hate Target Date Funds
October 19, 2011
Other advisers say that poor investment choices, or high expenses, can be a good reason to opt-out of a 401(k) plan. The best 401(k) plans charges employees as little as 10 basis points, says Mike Alfred, CEO of BrightScope, which rates plans nationwide. "There are also plans with expensive insurance costs that can run as high as 9% -- investing in a high fee 401k plan can cost a worker hundreds of thousands of dollars in lost savings over their working career when compared to a lower cost plan. In cases where all-in fees get that high, it's hard to argue with an adviser's assertion that the participant might be better served to invest elsewhere."
401(k)s: When Opting Out Makes Sense
October 18, 2011
The study finds that the industry is moving toward a more conservative posture on the critical issue of fund series glidepaths – that is, the year targeted for the lowest exposure to equities. "Funds can take very different approaches to the glidepath," explained Brooks Herman, Brightscope’s head of research. "Sometimes the landing date can be many years past the target date in the fund name."
The Brightscope/Target Data Analytics study finds that 40 percent of TDFs are now using a "to versus through" approach to glidepath, up from 30 percent as recently as 2007. That means the most conservative asset allocation is reached in the year of the fund series name. "We like that, because it’s truth in advertising," Herman said. "As an investor, I know what I’m getting."
Target date funds get better and bigger, report finds
October 18, 2011
Why target date funds will become largest 401k option in just a few years, with CNBC's Sharon Epperson.
Mike Alfred, co-founder and CEO of financial information company BrightScope, said the several suits against employers related to 401(k) plans pushed that regulation forward but compliance and more-detailed disclosure will be up to the providers, such as Fidelity, Vanguard and Charles Schwab.
Will 401(k) Fee Disclosures Bring Clarity to Perplexed Workers?
October 13, 2011
A growing number of 401(k) plans are adding to their investment menus so-called socially responsible funds -- mutual funds that invest in or avoid certain companies, based on pre-stated ethical guidelines. A recent survey by human resources consulting group Mercer found that 14% of 401(k) plans now offer a socially responsible option; the number is expected to double within the next three years. This is the first year of the Mercer survey, but if the numbers prove correct, that would be substantial growth: Only 9% of plans offered such an option in 2009, according to the most recent data available from Brightscope, an independent rater of 401(k) plans.
401(k) Plans Get Responsible
October 11, 2011
At an age in life when most Americans barely contribute to their 401(k)s, brothers Mike, 30, and Ryan, 28, have written the book on them -- or, to be more precise, on some 50,000 of these company retirement plans. In 2008 the former money managers teamed up with veteran HP engineer Dan Weeks to create BrightScope, an online site that brashly aims to rate every 401(k) offering in the nation, based on data provided in securities filings and other records. (Anyone can check out their own -- or any company's -- plan for free; more in-depth analytics are available for hefty subscription fees.)
Power 30: The World's Most Influential Players
October 11, 2011
Mike Alfred, founder of 401(k) rating site BrightScope and ultra-marathon runner, on the race to save for your future.
It isn't easy picking investments when quality bonds offer meager yields, stocks are acting bipolar and the richest economies are struggling to grow. But many 401(k) investors face an added challenge: choosing from a mutual fund menu that's too limited, too pricey or both.
The average 401(k) offers 24 fund choices, according to BrightScope, which tracks plan data. That should be plenty, but choices are often redundant when it comes to core stock and bond funds and lacking in other areas. Some plans lack entire asset classes, like small-company or international stocks, and fewer than 3% of plans offer funds that invest in inflation-fighting assets like real estate, commodities and Treasury Inflation-Protected Securities, or TIPS, according to Mike Alfred, BrightScope's chief executive.
5 Ways to Make the Best of Your 401(k)
October 4, 2011
The most recent 401(k) fee lawsuit was filed last week against Ameriprise Financial Inc, which bills itself as "America's leader in financial planning." The suit, which was brought on behalf of several employees and is seeking class action status, alleges the financial firm pushed workers into expensive and untested proprietary funds at a cost the lawyers for the employees say is more than $20 million...
... "These lawsuits have really helped shine a light on the fact that there are very large plans that have fees that are too high," said Mike Alfred of Brightscope, a firm which monitors and grades 401(k) plans.
Analysis: Latest 401(k) lawsuit highlights ongoing fee concerns
October 2, 2011
The company that raised industry hackles when it introduced ratings of RIAs based on government data last spring is now preparing to give consumers a forum to sound off about their financial advisors.
BrightScope, Inc., which provides background on 450,000 advisors based on reports from the Securities and Exchange Commission and FINRA, is adding a section to its Advisor Pages that will let consumers write reviews about advisors – a concept akin to popular consumer websites like Yelp or Tripadvisor.com.
The employees of the Saudi Arabian Oil Company and Southwest Airlines may be the target of 401(k) envy if they retire in the near future. Financial data company BrightScope lists those two companies as having the best 401(k) plans in the country based on BrightScope's proprietary plan rating.
The Best Employer 401(k) Plans
September 18, 2011
Timing is everything. BrightScope nailed it by having an article about their success – and controversy – make it in to The New York Times. Although it appeared on Saturday, the 401(k) and RIA tracker was able to have the article showing on a 40-inch flat-screen monitor in its booth.
An advertiser's-eye view from among the booths of the FPA convention's exhibit hall
September 16, 2011
Up the stairs from the Chicken of the Sea offices in the northern reaches of this city, two brothers and about three dozen of their employees mine databases in a fledgling effort to help Americans retire a little sooner and manage their money a little better.
It’s Not Easy Shining a Light on 401(k) Plans
September 16, 2011
The SEC list is not always universally considered user-friendly. BrightScope, Inc. of La Jolla, Calif. created Advisor Pages to close this gap and companies like RIA Database have also modified the SEC's data to some success. In answer to a question after his speech today, Clark said he was hopeful that Schwab would one day generate an online list where you could enter a zip code and find an advisor. See: BrightScope’s huge advisor database is first search-engine friendly way to connect consumers, advisors.
Schwab to pump millions of dollars into promoting RIAs as a channel
September 13, 2011
A better question to ask than why have so many investors fled is why have so many stayed. It helps that $11 billion of the fund's assets came from employer-sponsored retirement plans in 2009, according to the most recent data available from BrightScope, which tracks retirement plans. That was about half of the fund's assets at the time.
Indeed, Magellan remains the fifth-biggest large growth equity fund used amongst 401(k) plans, according to BrightScope. And investors often have few options when it comes to choosing funds in their retirement plans, says Russel Kinnel, director of fund research at researcher Morningstar. "I don't suppose a lot of people have been coming to the [Magellan] fund in the last couple of years on their own," he says.
Why Is Magellan Still So Big?
September 10, 2011
Net assets in the ESOP plan reflected Jeld-Wen's rise and fall. They reached $720 million in 2006, company filings show. But by the end of 2009, the assets had plunged to $335 million, according to BrightScope, a data company that follows corporate filings.
Jeld-Wen's financial problems spill over on shareholders, past employees
September 1, 2011
Mike Alfred, co-founder and chief executive officer of BrightScope, expects the prevalence of exchange-traded products offered in 401k plans to grow dramatically. Bloomberg Radio's Catherine Cowdery reports on Exchange Traded Funds.
BrightScope's Alfred on ETFs in 401k Plans: Audio
August 24, 2011
I think the general reaction is somber. It’s hard to see Apple maintaining its product dominance without Steve Jobs. But I can also see Jobs continuing to wield his influence on product and marketing decisions on a less than full-time basis. So, it’s still unclear what effect this will actually have on the company.
Still, analysts caution that the new strategies remain unproven. "You need a full market cycle to assess whether the changes in risk management are positive for investors," says Ryan Alfred, president of BrightScope Inc., a financial data firm.
The new approaches also can introduce new risks and higher costs. And while some of these funds may be able to provide greater downside protection, they also may be left behind when stocks rebound.
Target-Date Funds: Looking Better (REQUIRES SUBSCRIPTION)
August 10, 2011
So your next question should be how much is your employer being charged in fees. BrightScope, a firm that gathers retirement data, estimates those firms with employee funds that average more than $100 million in assets are charged about 1.08 percent all-in. Those with retirement savings of between $10 million and $100 million pay 1.36 percent, and employers under $10 million could be forking out as much as 1.90 percent.
401(k) fee crackdown delayed
August 10, 2011
The FRC study, "Trends in Target-Date Portfolios on Recordkeeper Platforms,” is a joint project with BrightScope, a provider of retirement plan ratings, and the authors say the study reveals a trend that may mean trouble for fund managers. Because not all funds in a series are accepted by sponsors, they say, some fund managers may be confronted with unanticipated demand for their funds.
Lynette DeWitt, author of the report, pointed to BrightScope data revealing that in one retirement plan, only five out of 12 funds in a target-date series were selected by the plan sponsor. When this trend plays out in the broader marketplace, DeWitt said, it can lead to varying asset levels across target-date categories. As seen in FRC’s data, she added, 70% of target-date mutual fund assets are held in the five most popular fund categories: 2015, 2020, 2030, 2025 and 2040.
Sponsors Limit Target Date Fund Picks: FRC Study
August 8, 2011
BrightScope, which recently launched an online database of financial advisers' public records, is aiming to do the same with advisers' performance results. Last month the company started discussions with a committee of investment advisers about ways to standardize performance reporting.
BrightScope also hopes to raise awareness of the performance issue among investors, many of whom never ask to see advisers' track records. "Our goal is to use consumer awareness to compel advisers to play ball," says Mike Alfred, BrightScope's chief executive.
Advisers' Little Secret: Their Past Results
August 5, 2011
But although ETFs are becoming an increasingly popular investment vehicle for investors, not many retirement plan managers have yet worked out how to incorporate ETFs into 401(k) plans because of the trading complexities (such as intra-day liquidity) of ETFs.
As a result, ETFs still only account for a tiny portion of holdings in US retirement funds. According to BrightScope, 401(k) plans held $2.7bn in ETFs at the end of 2009, compared with more than $4,500bn held in mutual fund 401(k) and other defined contribution plans at the end of 2010.
Brinker Capital adopts ETFs for retirement planning
July 14, 2011
Even if your company stock amounts to "just" 25% of your entire nest egg, keep in mind that much or all of your current livelihood also depends on that same company. If it falls on hard times, you could face a double whammy: a pink slip and a sinking stock.
A glance through Brightscope.com's reports on familiar companies shows that investors have devoted considerable chunks of company 401(k) plans to their employers' stock. At Sirius XM Radio (Nasdaq: SIRI ) , company stock represents 13% of investors' 401(k) holdings. That may not seem like much, but Sirius XM still faces significant debt and steep challenges from Pandora's (NYSE: P ) Internet radio.
Corning's (NYSE: GLW ) 401(k) plan has 25% of its plan assets in company stock. Even with the company's strong position in specialty glasses and ceramics, and relatively low valuation, that still might not be a smart move for employees.
Beware of Your Company's Stock!
July 13, 2011
But the fees charged by the mutual funds are only one part of the fees you might be charged by your plan. Your employer -- actually, legally speaking, the plan itself -- may also be paying fees to the company that administers the plan on their behalf, and these fees may be passed on to participants.
What kinds of fees are these? They cover recordkeeping services, "custodial" services (Wall Street-speak for holding the money and securities), processing for all those 401(k) loans, shareholder services (including things like the folks who answer the phones), etc., etc.
These fees are disclosed in the plan's Form 5500, a little-known annual regulatory filing that lays out all the details of a plan's operations. I took a look at a few this morning, and while the fees aren't enormous, they're not zero...
The Secret Cost of Your 401(k)
July 8, 2011
Ryan Alfred, co-principal of La Jolla, Calif.-based Brightscope, a 401(k) tracker, says that smaller providers have always been associated with service and larger ones with the promise implicit in a strong brand name.
"The 'brand equity' firms work with large companies and the 'service' firms work with small companies. It seems that how firms win business depends on the market segment. I hear all the time from jumbo sponsors that the only providers they feel safe working with are Fido, Vanguard, and Hewitt. No amount of service will win that business for a firm like Paychex, which focuses on micro and small plans."
Fidelity, Vanguard and Schwab have top 401(k) brands but plan sponsors like the service of off-brands better, study shows
July 8, 2011
At the request of Dow Jones, pension consultant BrightScope used its database to gauge payments by a handful of individual funds that are popular in retirement plans.
It estimated:
The Bill Gross-led Pimco Total Return Fund (PTTRX) pays about $145 million a year for what’s termed "shelf-space."
The popular Growth Fund of America (AGTHX) pays $75 million a year to retirement plans.
The Dodge & Cox Fund (DODGX), whose managers are famous for refraining from self-promotion and avoiding the media, pays around $20 million a year.
Pay To Play In 401(k)? Pimco, Dodge & Cox, American Funds Eyed
July 8, 2011
BrightScope, a company that tracks and ranks 401(k) plans, searched employers that reported enough data to the federal government that BrightScope could track the percentage of employee retirement funds in the self-directed option. In 2009, the bankers and brokers at the financial services firm Morgan Keegan & Company had 81 percent of their funds in the self-directed option. Some law firms were also above 50 percent.
A 401(k) Window to More Investing Choices
July 7, 2011
Generous employer matches, broad and often imaginative investment choices, and low fees are the common attributes of the nation's most attractive 401(k) plans, according to rankings from BrightScope, a firm that tracks the performance of more than 50,000 retirement plans which it says contain 90 percent of all retirement plan assets. The top 10 plans BrightScope identified for U.S. News had to have assets exceeding $1 billion to be included in the ranking.
The 10 Top-Rated 401(k) Plans
July 6, 2011
If you're with a company and the advisor changes, you could be left with a different advisor who has to re-learn your situation. And if your advisor has job hopped a lot (one or two switches is fine), that could be a sign that he has money, people or even compliance problems of his own. Check his job history and regulatory record by going to online databases like Brightscope.com, which shows data collected about financial advisors.
Is It Time To Fire Your Financial Advisor?
July 6, 2011
FRC analyzed data from BrightScope's retirement plan database and found the average participant-paid costs as a percentage of assets for the smallest plan groups was more than three times those of the largest plans.
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Plan sponsors are looking for different investments for their plans in anticipation of increased demand for cost reductions when better fee disclosure improves understanding among participants.
Regulatory Pressure Stresses DC Plans' Revenue
July 3, 2011
Offering a window doesn't help or hurt a plan's score at brightscope.com, said co-founder Ryan Alfred. In plans that have them, "no one can complain they didn't have access" to lower-cost options, he said. On the flipside, too much choice can have a paralyzing effect on inexperienced investors, he said.
Brokerage windows: Make sure you have a clear view
July 1, 2011
If you don't already have an adviser, look for one in your area at NAPFA.org — the National Association of Personal Financial Advisors' Web site, which lists thousands of accredited, fee-only advisers. You can also check out BrightScope.com's new adviser tool, which allows you to see customer ratings of advisers.
3 Biggest Drivers of Retirement Savings Success
June 23, 2011
And there hasn't been a central online marketplace where consumers can view ratings and recommendations -- until now.
Brightscope, a young company that made a splash two years ago with its online performance measurement tools for 401(k) plans, recently rolled out a new site, Brightscope Advisor Pages, which aims to help people research and shop for financial advisors.
Brightscope's new service could give a needed jolt of transparency to the financial advisory field, where finding an advisor is often a hit-or-miss process driven by word-of-mouth and referrals.
New Online Marketplace for Financial Advisors Stirs Up the Market
June 20, 2011
"The paradigm needs to shift, because the old paradigm is not working," says BrightScope, Inc., CEO Mike Alfred of how to gauge 401(k) plans' success. Doing plan benchmarking and then revealing the results to employers "is not the way it traditionally works when you have a really efficient market—the information has to find its way to the end investor,†he says. “Just because that is the way it has been done does not mean it is working."
Participants in 401(k) plans need more transparency into their own plans and other 401(k)s to understand if they have a good plan, Alfred says. "Bringing transparency to any financial market lowers the cost long term for investors," he says. "We are trying to bring that same efficiency to this market."
Drilling Deeper: A look inside fee benchmarking services
June 15, 2011
Exchange-traded funds are slowly making their way into 401(k) offerings, according to a new report from BrightScope, a firm that evaluates 401(k) plans. ETFs are still a very small presence in the huge retirement-fund business. But Brightscope predicted dramatic growth for the low-fee funds in retirement plans as it released its first list of the 20 ETFs most prevalent in 401(k) plans. ETFs from Vanguard and iShares, a unit of Black Rock, dominate the group.
"ETFs are off to a slow start in terms of their distribution in 401(k) plans but we expect their prevalence to grow dramatically in the future as plan sponsors begin to understand the benefits of including them on plan menus," Mike Alfred, co-founder and CEO of BrightScope, said in a prepared statement.
ETFs Slowly Moving Into 401(k) Plans
June 14, 2011
Some interesting data out of BrightScope today shows that the defined contribution plan market (that is, funds that are bought to fill 401-K plans or other employer-offered retirement funds), currently held primarily by mutual funds, may finally be opening itself to another player – The ETF.
BrightScope's data shows that exchange-traded funds are appearing in slightly higher distribution levels among U.S. 401K funds this year. Though the numbers are nowhere near shattering the hold that mutual funds have on pension fund investments, it may indicate that employers are becoming more familiar, and therefore more comfortable with ETFs as choices for the long-term growth of an investment. BrightScope's CEO Mike Alfred said:
"ETFs are off to a slow start in terms of their distribution in 401k plans but we expect their prevalence to grow dramatically in the future as plan sponsors begin to understand the benefits of including them on plan menus. The risks of ETFs have been wildly exaggerated. In many ways, ETFs are actually less risky than other instruments if the focus is on long-term returns."
Creeping In On The Mutual Fund In 401K Investments – The ETF
June 14, 2011
Figuring out how much you're paying in fees is about to get easier: Starting next year, the Department of Labor will require companies to give 401(k) plan participants a breakdown of plan fees. In the meantime, there are other tools available. BrightScope, an independent website, provides ratings for thousands of 401(k) plans at www.brightscope.com. The AARP offers a 401(k) fee calculator at aarp.org/401kfees. You have to register to use it, but registration is free.
Five ways to avoid sabotaging your 401(k) plan
June 13, 2011
But Morningstar is also taking a good look at offering a more pioneering service: rating registered investment advisors, according to the company's CEO, Joe Mansueto. This would be a wholesale change for the company that has always provided information for advisors — not about them.
The issue of helping consumers monitor their advisors took center stage recently when BrightScope began offering a free advisor-search system, Advisor Pages, to consumers. See: BrightScope's huge advisor database is first search-engine friendly way to connect consumers, advisors
When it launched the program, BrightScope founder Mike Alfred predicted that other firms such as Morningstar would eventually try to craft a similar type of product.
Morningstar's Mansueto views next horizon: rating RIAs
June 9, 2011
It's not at all clear that Schwab can make a dent in the business, considering its lack of a track record in the 401(k) market. "Schwab was late to game, and they've had very little success cracking large company plans," says Mike Alfred, CEO of Brightscope, which tracks 401(k) plan performance. "They have nothing to lose by trying this. Companies like Fidelity have a cash cow to protect with their 401(k) record-keeping businesses, and actively managed funds."
Schwab intends to roll out the new platform in two phases. The first, targeted for launch in the first quarter next year, will be an offering of indexed mutual funds combined with managed accounts; later in the year, Schwab intends to launch a second offering combining advice with ETFs.
Schwab plan points toward a changing 401(k) market
June 7, 2011
Brightscope.com has a tool for analyzing the quality of your 401(k), based on Form 5500 filed with the United States Department of Labor. While the filings may be for prior years, they offer a good perspective on a plan's fees and expenses. You should also look at the prospectus and any plan documentation to make sure you are thoroughly aware of the fees and characteristics of the investments you own.
How To Manage Your 401(k)
June 3, 2011
To that end, BrightScope, a leading firm that tracks 401(k) plans, this week issued its first Top 10 Treasury Inflation Protected Securities, or TIPS, in 401(k) Plans.
"We're putting out this data because we think it's valuable to show the market which funds are winning and losing," says Michael Alfred, founder of BrightScope.
With inflation on a tear, 401(k) plans look vulnerable and BrightScope publishes a cheat sheet
June 3, 2011
In the latest, but potentially risky, move to fight inflation, some of the nation's largest 401(k) providers are adding commodities funds and other alternative assets to normally play-it-safe retirement plans.
The percentage of 401(k) plans offering a commodities fund nearly doubled to just under 9% from 2007 to 2009 -- the most recent available data from Brightscope, an independent rater of 401(k) plans. During that time, assets in these funds jumped 50% to $1.5 billion. And while data for 2010 won't be available until the fall, when retirement plans are required to file their official annual disclosures to the Department of Labor, industry experts say more plans are adding the alternative investment option.
Do Commodities Fit in Your 401(k)?
June 3, 2011
Employers are supposed to act as a fiduciary when running a retirement plan, which is a legal way of saying that they are supposed to put your interests first. But in the context of fees, they must only keep them "reasonable."
And there aren't many specific definitions of what is unreasonable, for a couple of reasons. Benchmarking against other plans has traditionally been difficult, given that employers themselves often don’t know exactly what their plan costs. "If you don't know what everyone else is paying, there is no way to know what is reasonable," says Mike Alfred, BrightScope's co-founder and chief executive, whose team has gathered information on 47,000 plans so far and sorted it by peer group.
Shedding Light on Excessive 401(k) Fees
June 1, 2011
By opening ETFs to so many investors, critics say, Schwab's plan could leave the market more vulnerable to these forces. It also could eat into Schwab's core retail-brokerage arm, which holds the bulk of the firm's $1.65 trillion in client assets.
"Schwab is betting it all," says Mr. Alfred of BrightScope. "They could cannibalize their own business. Compared to other players, they're a chipmunk among gorillas. The question is whether they're going to be a chipmunk that is growing."
Schwab's Bold Bet on ETFs
June 1, 2011
Defined contribution investment-only players with TIPS (Treasury Inflation Protected Securities) offerings may want to look at the latest list released by BrightScope. Today the San Diego-based data specialist proclaimed the top ten TIPS mutual funds inside of 401(k) plans, in terms of assets. Funds from Pimco, TIAA-CREF and Vanguard came out on top.
Which TIPS Funds Are Rolling in 401k Dough?
June 1, 2011
If your former employer doesn't offer much help, it might make sense to move your money to an IRA.
Another advantage of rolling the money into an IRA is that combining your funds in a single account makes managing a diversified portfolio easier, said Ryan Alfred, president of 401(k) rating company Brightscope.
"The perceived advantage [of employer plans] is you're getting institutional pricing on a couple of the funds," Alfred said. But it's easy to find cheap investments in IRAs, and few investors do "a great job of managing all of their [disparate] accounts as one."
What to do with your 401(k) if you leave your job
How do you rile up 450,000 financial professionals in a single day? Make their public records more public.
On April 26 BrightScope launched an online database of financial advisors' public records, which includes information about the assets they manage, a history of customer complaints and disciplinary actions, criminal records, career history and more. The database is the first of its kind for the financial services industry, and allows investors an easy (free) way to do some basic due diligence on potential or existing financial advisors.
Names You Need To Know: BrightScope
May 29, 2011
Another advantage of rolling the money into an IRA is that combining your funds in a single account makes managing a diversified portfolio easier, says Ryan Alfred, president of 401(k) rating company Brightscope.
Your 401(k): Leave It or Roll It?
May 19, 2011
We sneaked a peek at the financial hand Las Vegas is holding by tabulating a ton of data: personal bankruptcy rates (FDIC); average credit scores, debt, late payments, and credit usage (Experian); percentage of homes facing foreclosure (RealtyTrac); percentage of homeowners and renters who spend more than 30 percent of their income on housing (U.S. Census); and average 401(k) contributions (BrightScope).
American Cities with the Most Debt
May 19, 2011
Unlike bigger firms, with their array of salespeople and lower-cost share classes for institutional investors, Fairholme offers the same share class — no-load, with a 1 percent management fee — to all comers. Unusual for funds of its size and track record, Fairholme Fund is barely visible in the $3 trillion 401(k) market: Just 146 companies, including Nike and Xerox Corp., offered it in their lineups, for a total of some $138 million in assets, according to the most recently available data from 401(k) tracking firm BrightScope.
Fairholme's Bruce Berkowitz Is Beating Hedge Fund Managers At Their Own Game
May 19, 2011
The best plan sponsors, like IBM, insist on first-class investment choices, bargain hard over fees and require outside service providers to itemize costs, says Michael Alfred, cofounder of BrightScope, which rates 401(k) plans and financial advisers.
Not surprisingly, big employers, with dedicated staffs and bulk buying power, tend to get the best deals. On average, participants in large plans pay 1.08% in fees annually and those in small plans pay 1.9%, says BrightScope.
Find The Fees
May 16, 2011
If you don't think your current 401(k) plan is as good as it could be, do some research and then speak up.
Start by checking up on your company's 401(k) with Brightscope, an independent firm that rates 401(k) plans. Simply enter your company name on the website and you'll see how your company's plan compares to other companies.
For example, my husband's company has a 401(k) plan rated at 68 -- on the higher end of the "Average" rating. Not so bad. But the site says this rating could translate into "11 additional years of work or up to $103,400 in lost retirement savings." And that's before this most recent change in investment options.
The 401(k)s They Are A-Changin'
Listen to the arguments against transparency: The reader won't understand the newly disclosed information. There'’s not enough context for consumers to make the right decision. Vendors will be unfairly hurt if the data is inaccurate. The common thread is the consumer must be stupid.
How do you think car dealers felt when consumers suddenly had access to the true cost of automobiles? Or travel agents when travelers saw they could get a better deal on their own. How about yellow pages advertisers when they saw their businesses get poor ratings on Yelp? The arguments were always the same, but there was no going back.
And just last month, the folks at BrightScope launched a financial advisor directory that aims to eventually offer much more information than FINRA does -- including broker performance records.
That can be a big boon for investors, because while it may be comforting to know that your broker hasn't been caught doing anything illegal, he may still be lousy at his job. Right now BrightScope offers more limited information, but it's still instructive for us as investors.
Informative details
For example, BrightScope says that E*TRADE Financial's (Nasdaq: ETFC) capital management division sports an average of $178,000 per reported customer account, according to SEC filings. That's good to know, because if you have limited assets and are signing up with a firm that focuses on the wealthy, you may be in the wrong place. The report for AllianceBernstein (NYSE: AB), for example, reveals an estimated average account balance of $6 million. Sometimes, it's good to deal with firms that work mainly with people like yourself.
Sneak a Peek at Your Broker's Record
May 9, 2011
The last hurdle is poor plan design by the employer. It is the responsibility of the employer for having a plan with low fees and an adequate selection of investment options. Based on analysis by BrightScope, few 401k plans (and even fewer 403b plans) are top performers. The vast majority could be improved which means that only 1-2% of all American workers can expect adequate retirement income from their defined contribution plan during retirement.
Don’t Trip Over Basic 401(k) Hurdles
May 9, 2011
At the end of April, hundreds of thousands of financial advisors entered the age of transparency when BrightScope launched financial advisor pages. There has never been a comprehensive online directory for financial advisors driven by public data. Now, due to the efforts of two young entrepreneurs and their California-based startup, anyone who wants to learn more about financial advisors before tapping one to manage their assets can do so online.
The advisor data was locked up at the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), the largest independent securities regulator in the U.S. Both the SEC and FINRA declined to comment for this story.
"Ryan [Alfred] and I knew this data was there because we were advisors," said Mike Alfred, co-founder of BrightScope. "We knew data had been filed but it wasn't clear what was being done with it. We'd never seen it liberated from the government databases."
While they knew the public data existed and had the idea to do this years ago, Alfred said it didn't happen because they "weren't in the mindset of being data entrepreneurs" yet. "By going after 401(k) first, we could build the capacity to process large amounts of data. We could take that data and present it on the web in a way that would be usable to the consumer."
BrightScope liberates financial advisor data
May 8, 2011
Participants in some 401(k) plans may discover that it's cheaper to stay put. Often, plans with assets of $100 million or more receive access to low-cost investment products, including collective trusts, which resemble mutual funds but generally charge lower fees. (To find out what you're paying in investment and administrative fees, ask your plan administrator or go to BrightScope.com, which rates plans.)
Should You Roll Over Your 401(k)?
May 6, 2011
Unseen fees charged to investors are one of the biggest variables in 401(k) plan performance — especially at smaller companies. These include investment product fees, administration and record-keeping fees and other fees for investment advisory services, insurance and auditing. Research by Brightscope.com shows that average 401(k) total plan cost can be as low as 0.20 percent of assets for the largest plans and a whopping five percent for smaller plans.
5 ways to make 401(k) plans more like pensions
May 2, 2011
BrightScope executives say they will stay the course in their plan to make data about 450,000 financial advisors accessible, even though the company's publication of the data and plans to profit from it are angering some advisors and industry observers.
The La Jolla, Calif.-based company that launched in 2009 to track 401(k) plans the way that Chicago-based Morningstar tracks mutual funds is being criticized by some advisors for its new effort — BrightScope Advisor Pages.
RIAs have about 25% of the 401(k) market, said Mike Alfred, chief executive of BrightScope Inc., a software company that analyzes 401(k) plans.
But the Labor Department's proposal to eliminate a rule that exempts plan advisers from fiduciary liability if they don't provide continuing advice, and another that would ramp up the disclosure of costs, could increase that percentage.
The 401(k) market "is completely coming to [RIAs] because they're already disclosing fees and acting as fiduciaries in making investment selections" for plan sponsors, Mr. Alfred said.
Tougher 401(k) rules seen as 'full employment act' for RIAs
April 30, 2011
BrightScope.com, the website that rates and ranks 401(k) plans, launched a new, searchable site last week to help investors research financial advisers more easily online.
Currently, consumers have to search the databases of at least two sites -- the SEC's website and FINRA's BrokerCheck -- to discover arbitration awards. Neither is particularly easy to find. Earlier this year, an SEC staff report recommended unifying the two databases in one search result.
BrightScope has essentially done that with its new site. It gleans publicly available info from those sites and attempts to gauge an adviser's experience, qualifications, assets under management and conduct.
"Investors for years have really never been able to put the referrals they get from neighbors and golfing buddies into context," company co-founder Mike Alfred said.
Portland attorney prompts SEC to review disclosure loophole in financial adviser brochures
April 29, 2011
The lingering pain of the worst bear market since the Great Depression has caused more consumers to seek financial help. Unfortunately, the increased demand for professional advice resulted in a corresponding pickup in cases highlighting that anyone can claim to be an investment adviser, and not all of them are trustworthy. Last year, the Securities and Exchange Commission filed 681 enforcement cases against broker-dealers and investment advisers, the highest since at least 2004...
The new website was created by BrightScope, a provider of independent 401(k) plan ratings. "We don't feel that investors have enough information," says Mike Alfred, BrightScope CEO. The SEC and the Financial Industry Regulatory Authority (FINRA) provide public websites about investment advisers and brokers, but Alfred says they are not consumer-friendly, and you can't find anything unless you have the complete, accurate spelling of an individual's or company's name. Also, he says many consumers aren't even aware that the SEC and FINRA websites exist.
What to look for in a financial adviser
April 29, 2011
For years , consumers have been able to search Google for just about anything—except, for the most part, the regulatory histories of financial advisers.
That is changing. On Tuesday, BrightScope.com, an independent rater of 401(k) plans, launched a new directory called "BrightScope Advisor Pages" that purports to index for search engines the backgrounds of nearly 450,000 financial advisers.
"We're trying to bring transparency into the marketplace," says Mike Alfred, BrightScope's chief executive officer. "There is no easy way for the consumer to get the aggregated data."
Each adviser has a profile that lists location, experience, qualifications, amount and types of assets under management, area of specialty, legal disputes, and formal complaints.
The data on the site is still being populated. Eventually profiles also will list fees and performance figures, said BrightScope CEO Mike Alfred.
"There certainly are red flags in these types of disclosures that when added up over time can give a consumer just a hint of what that person is really like," Alfred said. "That's what this is really all about is providing information that can help people make better decisions."
New finance tools to try: Credit score estimators, free credit monitor, an adviser directory
April 28, 2011
In the first credible attempt to harness the power of search engines to connect consumers and advisors, BrightScope Inc. has used public information to create an easily accessible database of nearly 450,000 advisors.
Advisors can pay to add their own marketing information to their profiles. Advisor Pages can be found at: http://www.BrightScope.com/financial-planning/find/advisor.
Washington, DC – AARP today released a survey revealing that 401(k) plan participants are largely unaware of the fees they pay to their plan providers. When asked, more than seven in ten (71 percent) 401(k) plan participants incorrectly reported that they did not pay any fees and six percent said that they did not know whether or not they pay fees. A new, free 401(k) fee calculator on AARP's web site aims to help investors better understand 401(k) fees and their potential impact.
"Americans are trying to plan for their retirement without all the information they need about their 401(k) plans," said Jean Setzfand, AARP Director of Financial Security. "The research shows a clear lack of understanding about 401(k) fees and the impact they might have on one's saving. We developed this calculator to help people make better informed decisions about their retirement savings plans."
The AARP 401(k) Fee Calculator, powered by BrightScope, Inc., is a revolutionary tool that estimates the fees associated with individual plans and compares them to the average for a low-cost 401(k) investor. It also approximates in dollars the potential impact of the fees on the investor’s balance at retirement age.
AARP: 401(K) PARTICIPANTS UNAWARE OF FEES ASSOCIATED WITH THEIR PLANS
April 28, 2011
BrightScope, a firm that rates corporate 401(k) plans, this week launched BrightScope Adviser Pages in an effort to facilitate comparison among registered investment advisers (RIAs) and broker-dealers. The service aims to give consumers free, in-depth profiles of 450,000 financial advisers, with more to be added in the coming months. The site aggregates public information from the Securities and Exchange Commission (SEC) and the private non-profit Financial Industry Regulatory Authority (FINRA). (RIAs are regulated by the SEC or a state securities regulator; broker-dealers must be registered with the SEC and be members of FINRA.)
"The database is searchable from every dimension you want, and truly public in that Google will be indexing it," says Mike Alfred, BrightScope co-founder CEO. "Up until now, if you search an adviser's name on Google you would never find the SEC or FINRA data directly, because the format makes the data impossible to scrape." (Spokespeople for the SEC and FINRA declined comment.)
Finding Red Flags in Your Adviser's Record
April 28, 2011
BrightScope Inc.'s new free website, which allows investors to look up financial advisers, already has sparked controversy.
A number of advisers claim that the firm is publishing incomplete information and charging them if they want to fix it.
On Tuesday, BrightScope launched Advisor Pages, which allows consumers to search for advisers according to a number of criteria, such as geographic region, assets under management and firm. The pages also include information on legal disputes and formal complaints.
BrightScope aggregated the data by tapping public information from the Financial Industry Regulatory Authority Inc.'s BrokerCheck database and the Securities and Exchange Commission's investment adviser database.
Advisers take dim view of BrightScope's controversial website
April 27, 2011
"The big picture idea here is that we believe there are close to a million people who call themselves financial advisers around the country, and we don't think that there is enough data out there for consumers to really do due diligence, not just for their current adviser but advisers they might want to work with," he says."There is no easy way for consumers -- unlike a mutual fund, where you can just go to Morningstar(MORN) and compare three large-cap funds to see which one fits your needs -- to do that with advisers. "
BrightScope Adviser Ratings Tool Goes Live
April 27, 2011
But given the possibility of getting duped by an outright crook like Bernie Madoff or being targeted by a glorified sales person posing as an adviser, you also want to confirm that you can trust the person you're hiring, and that you won't end up paying out outrageous fees.
That can be a tall order. But a new service, BrightScope Advisor Pages, has the potential to make the process of choosing and vetting financial planners, brokers and other advisers a lot easier.
As its name suggests, BrightScope Advisor Pages is run by the same people, twin brothers Mike and Ryan Alfred, who co-founded BrightScope, the website that rates 401(k)s and helps participants assess their plan.
Advisor Pages applies the same idea to financial planners, brokers and investment advisers.
Instead of you having to hunt down information about an adviser's credentials, work history, experience with regulators, etc., Advisor Pages culls this data primarily from the Securities and Exchange Commission and FINRA (Financial Industry Regulatory Authority) and turns it into a searchable online database.
'Is my financial adviser the next Madoff?'
April 26, 2011
Advisor Pages allows reps and planners to connect with potentially vast number of prospective clients; site also highlights rules infractions, formal complaints
"The databases that are out there are for people in the industry, but this will be in a format that the average investor can understand," Mr. Alfred said. "So for example, the baby boomer who wants to know how to invest their retirement savings can go to his site and find an adviser."
Research site for investors good news/bad news for advisers
April 26, 2011
Brightscope, which made a splash two years ago with its online performance measurement tools for 401(k) plans, is launching a free service on Tuesday to help people research and shop for financial advisers...
Advisor Pages could have its biggest impact by simply making a wealth of data on advisers visible to major search engines, says Mike Alfred, who co-founded the company with his brother Ryan. "One of our big objectives is to change the business by adding search visibility. Our data will be better and more prominent than what's on an advisory firm's websites or on a LinkedIn profile."
Brightscope launches online marketplace for adviser shopping
April 26, 2011
The firm will begin publishing today a database of registered investment advisers and brokers that displays customer disputes and terminations as well as assets under management, and eventually aims to publish performance histories and fee schedules that investors may search, Mike Alfred, co- founder and chief executive officer of San Diego-based BrightScope, said in an interview last week at Bloomberg headquarters in New York.
"We see this as part and parcel of a larger movement to provide transparency for consumers" in financial services, said Alfred.
The site, which is free to investors, has about 450,000 listings on its database, and includes most registered investment advisers and a majority of brokers, Alfred said. The firm will add listings for insurance brokers, who generally are licensed with their individual states, during the next 90 days, Alfred said.
BrightScope Aims to Beat SEC, Finra Showing Adviser Disciplinary Actions
April 26, 2011
Fundsters and retail investors alike who want to find out more about their financial advisors, or who want to find new financial advisors, have a new resource to turn to. Today San Diego-based BrightScope, which already offers a publicly=searchable database on different 401(k) plans, unveiled BrightScope Advisor Pages, a new search-engine-friendly database of almost 438,000 advisors and counting...
The startup is launching Advisor Pages, a way for people to discover, research, and select the most appropriate and qualified financial advisor. BrightScope has aggregated hard-to-discover but publicly available information on advisors, creating a database of over 450,000 financial advisors around the U.S.
BrightScope will allow consumers to search for financial advisors by location, qualifications, amount and types of assets under management, area of specialty, legal disputes, formal complaints and more. BrightScope obtains its data directly from publicly available sources, including required regulatory filings from the Securities Exchange Commission. Financial advisors can also add to these primary sources by claiming their BrightScope Advisor Page.
BrightScope Wants To Help You Find A Qualified Financial Advisor
April 26, 2011
"This is a big step forward for the public when it comes to transparency in the financial services space,†Alfred says. “It will look like night and day in six months when compared with what we’ve released today. We eventually plan to add customer reviews as well, but they will be rigorous in their documentation, not just some advisor slamming his competitor."
When asked if the new service is supposed to compete with similar databases compiled by the SEC and FINRA and offered to the public, Alfred responded with an emphatic "no," and noted the regulatory agencies had done a notoriously bad job in offering background checks and red flags on advisors to the general public.
BrightScope to Compete With SEC, FINRA on Advisor Background Checks
April 26, 2011
The directory aims to highlight information such as how much money an adviser oversees, how wealthy his or her clients are on average, and the adviser's resume and disciplinary record, among other data. Designed to be free to investors, the site is at www.brightscope.com.
Open government has strengthened the United States' reputation for being the most innovative and entrepreneurial country in the world. Many open government plans have laid out procedures for releasing high-value datasets that can spur new opportunities for economic growth. For example, Brightscope—a provider of 401K-related financial intelligence—has taken the Department of Labor's data about employee fees being paid for their retirement plans and built a successful information business, giving jobs to more than 30 employees in the last year.
Open Government Plans' Anniversary is a Testament to Hard Work at Agencies
April 4, 2011
With the help of BrightScope, an independent provider of 401k plan ratings, we've put together a list of top funds for various asset classes, including bonds, large-cap stocks, small caps and international investments.
5 battle-tested funds for 401k's
March 31, 2011
The most expensive plan administrators charge fees equal to more than 6 percent of the amount of money in employee accounts annually, while the lowest-cost providers charge less than one-tenth of one percent, says Ryan Alfred, co-founder of BrightScope, a San Diego firm that rates 401(k) plans. In most cases, the money comes out of employees' assets, but some companies shoulder a portion or all of the fees.
...Fidelity, which dominates the industry, is "very comfortable" with the increased competition, says James MacDonald, head of workplace investing for the Boston-based mutual-fund company. Fidelity administered 27 percent of all assets in 401(k) plans as of 2009, or three times more than Aon Hewitt, its closest competitor. Fidelity's client retention rate is 97 percent, and it runs the plans of General Electric (GE), Microsoft (MSFT), and IBM (IBM), among others, according to BrightScope.
Big Banks Go After 401(k) Trillions
March 30, 2011
But a report from Brightscope, which measures and analyzes 401(k) fund performance, argues that asset weighting masks the true costs of most TDFs. Brightscope research indicates that the only two target date fund series with expense ratios below 0.66 percent are those of Vanguard, with a rock-bottom 0.19 percent and USAA (0.64). "The rest of the funds have fees over 0.66 percent," Brightscope reports, “and over 50 percent of series have fees that are one percent or higher."
"The more data you look at, you see that target date funds are a clever way to ratchet up fees in comparison with just selecting three or four individual funds," says Mike Alfred, Brightscope’s CEO.
Retirement: The trouble with target date funds
March 29, 2011
Consider the case of the San Diego startup BrightScope. It was founded in 2008 by brothers Mike and Ryan Alfred, who realized that while Americans have more than $4 trillion invested in 401(k) plans, there is no independent agency that can tell them how their employers’ plans are doing compared with those at other firms. By law, 401(k) plans have to report their annual results to the Labor Department. So the Alfreds coaxed the department to release that data, and then they set to work crunching it. Soon they had created analyses so valuable that financial managers pay tens of thousands for a peek; BrightScope did more than $2 million in business in 2010 and now employs 30 people. "Without that public data, there's no company," Mike Alfred tells me.
Clive Thompson on How Information Can Fuel Jobs
March 27, 2011
"Ultimately, there is going to be fee compression, and that's going to hit advisers," said Ryan Alfred, co-founder of BrightScope Inc., which rates plans. "So firms like Schwab are trying to partner with advisers so that the advisers can still make 25 to 45 basis points on 401(k) plans, with costs that won't be too high [for the plan participants]."
New regulations spur cheaper 401(k) options
March 25, 2011
If your 401(k) plan isn't perfect either, try to get a group of co-workers together to make some noise. To give my pleas more heft, I pulled in my fellow personal finance scribe Tara Siegel Bernard, who knows even more about this world than I do; she offered her own comments via e-mail.
A company called BrightScope grades many 401(k) and 403(b) retirement plans on its Web site, so that may help you get a sense of where your plan stands. (For the record, it rates my plan's investment menu as merely average.) The site also names the plan administrator, so you know where to direct your inquiries.
If the Taxes Are Done, You Might Consider a Financial Tuneup
March 24, 2011
"The day that plan participants can see they are paying 3 to 5 percent in fees will change everything," says Mike Alfred, co-founder and CEO of Brightscope, a California firm that tracks and ranks 401(k) plans. "That all-in cost number includes not just mutual funds but administrative costs that most people didn't realize they were paying, because it's netted out of a fund's return." For example, a worker may think that the mutual fund he invested in rose 7 percent when it actually rose 8 or 9 percent before administrative fees were extracted from the return.
Getting a Better Deal in Your 401(k) Plan
March 23, 2011
The competition may mean lower costs and more choices for employers and savers, said Laura Pavlenko Lutton, an editorial director in the mutual-fund research group at Chicago-based Morningstar Inc. (MORN) Greeting-card seller Hallmark Cards Inc. switched its plan to JPMorgan last year to reduce costs and improve services for employees, said Tresia Franklin, head of benefits and compensation for the Kansas City, Missouri-based company.
Participants in the most expensive plans pay more than 6 percent annually, while the lowest-cost ones charge less than 10 basis points, according to Ryan Alfred, co-founder of San Diego- based BrightScope, which rates plans. A basis point is 0.01 percentage point...
...Fidelity, which dominates the business, is "very comfortable" with the increased competition, said James MacDonald, head of workplace investing for the Boston-based mutual-fund company. Fidelity administers 27 percent of all assets in 401(k) plans as of 2009, or three times more than its closest competitor, Aon Hewitt, according to Cerulli. Fidelity’s client retention rate is 97 percent and it administers plans for General Electric Co. (GE), Microsoft Corp. (MSFT) and International Business Machines Corp. (IBM), among others, according to BrightScope.
BofA Joins JPMorgan Seeking Bigger Share of $4 Trillion Retirement Market
March 22, 2011
So when it comes to your retirement fund, just how much should you have invested internationally?
Just over 20 percent of equity assets in 401k plans are in international equities, while domestic equities make up nearly 4 times that amount, according to BrightScope.com.
New Retirement: Focus on Foreign Stocks
March 21, 2011
Bellevue, Wash.-based T-Mobile USA's plan uses T. Rowe Price as a money manager and record keeper, according to BrightScope, a firm that provides ratings and research on 401(k) plans.
T-Mobile buy could add $700 million to AT&T 401(k) assets
March 11, 2011
Target-date funds
The banter around these funds isn't directly tied to Dodd-Frank, and has dual overlords at the SEC and the Department of Labor. Fidelity Investments, a big player in the target date space, has argued against certain disclosures. Brightscope.com, an independent rater of 401(k) plans also filed a comment, but arguing that the SEC proposal on target date funds "has serious limitations." Since these are a booming piece of the mutual fund pie, it will be interesting to see how regulators react.
The New Kid on K Street: Your 401(k) Manager
March 11, 2011
Some investor advocates are critical of the lobbying push, on the grounds that asset managers should be putting the interests of customers first.
"It's an industry," said Mike Alfred, co-founder and chief executive of BrightScope, an independent rater of 401(k) plans. Anytime regulators get more aggressive, "those deep in an industry are always going to scream," he said.
Asset Managers Take Up the Pen
March 7, 2011
Finally, in other happy news for Fish & Richardson associates, the firm recently came in at #6 on this list (PDF) of the top 25 law firms with the best 401k plans, compiled by Brightscope. Spending your bonus money on the latest fashions — or on gadgets and video games, since you are IP lawyers — can be fun. But it's never too early to start thinking about saving for retirement (especially if you don't enjoy a delicious defined-benefit pension plan, as many unionized state workers do).
Associate Bonus (and Salary) Watch: Fish & Richardson
February 25, 2011
Yet many retirement experts say corporations don't do a good enough job for their employees, often simply choosing the target-date fund run by the investment company that also handles back-office accounting services for the company's retirement plan. That partly is because fund companies typically offer those accounting services at a cut-rate price—or even without charge—if employers agree to accept in-house investment options that carry higher fees.
The marketing tactics make plans "look free" to employers, while costing workers extra, says Ryan Alfred, president of BrightScope Inc., a firm cited by the GAO for research on how companies select target-date funds.
While the GAO didn't recommend any specific changes to the way the target-date funds are operated, it suggested fund companies provide more information about fund designs to employers and that employers tell employees more about what is expected of them in terms of saving and withdrawing.
At least one outside expert that reviewed the study says the findings regarding target-date confusion ring true.
Many employers, especially smaller ones, "aren't doing enough homework," says Ryan Alfred, president of BrightScope Inc., a company that does retirement plan research.
GAO Highlights Target-Date Confusion
February 21, 2011
Now that retirement rests on the shoulders of workers, they want better advice.
"As humans, we decide how we are supposed to act by watching the crowd," Carstensen says. For retirement, many look at what their parents have done and don't realize that everything has changed. People need a new infrastructure that helps them know what to do and makes it automatic and invisible and a little bit at a time, she says.
The recession has shaken people up and made retirement planning even more difficult.
No wonder many people are now saving less than they can and should, says Mike Alfred, co-founder and CEO of BrightScope, a provider of independent retirement plan ratings and investment research.
"That is the No. 1 retirement issue," Alfred says.
Five Retirement Planning Mistakes to Avoid
February 17, 2011
As the DCIO market becomes increasingly crowded and competitive, asset managers should continue to look for new ways to differentiate their sales efforts. Whether that means more precise market segmentation or more aggressive opportunity targeting, it’s crucial that DCIO teams take the time to invest in the right tools and strategies that can achieve their goals.
How to Meet DCIO's Unique Sales Challenges (REQUIRES SUBSCRIPTION)
February 16, 2011
"Gross is very cognizant that it is the core holding in many people’s retirement portfolio, so he wants it to be very predictable and risk sensitive," he said.
Pimco has "well over" $450 billion invested in total return strategies including separate accounts, Jacobson said. Pimco Total Return was the most popular fund in the retirement market last year with more than $50 billion from defined- contribution plans, according to San Diego-based BrightScope Inc.
Gross's Ex-Rainmaker Hague Recruits Pimco Alumni
February 15, 2011
Annuities in these plans are expensive. Fees average over two percent—double that of 401(k) plans that hold low-cost mutual funds, according to Brightscope.com.
Annuities in 401(k) Plans Offer Income, but High Fees
"If a plan has abnormally-high fees, it's probably a sign that the company is not taking its fiduciary responsibility seriously," says Mike Alfred, co-founder and CEO of BrightScope, a free service that tracks and compares more than 55,000 401(k) plans.
How high is too high when it comes to fees? Alfred likes to see fees of about 1%. "Certainly, there are not a lot of services offered by 401(k) plans that are worth 2% a year. Nevertheless, such fees get charged all the time," he notes.
Four Ways to Tell If Your 401(k) Plan is Being Mismanaged
January 19, 2011
Ryan Alfred, co-founder and president of 401(k) rating company BrightScope, believes "roughly 50% of all participants, and particularly those in smaller plans, could save money by moving to low-cost options within an IRA." If your 401(k) fees are too high, some companies will allow "in-service withdrawals," an option to move money into an IRA while you're still employed by the plan sponsor. Other companies won't (to see which side of the aisle your company is on, check your summary plan description). And if you get a new job, you can roll your old plan's assets into an IRA or into your new 401(k), if it's less expensive.
Don't Lose Retirement Savings to 401(k) Fees
January 12, 2011
How soon employees can retire with an income equivalent to 75 percent of earnings during their working years has a direct bearing on the highest ratings received by companies in BrightScope's top 30-list of the largest 401k plans. The San Diego-based firm analyzes retirement plans, which are rated on areas like average salary deferral rate, employee match structure, investment performance, and fees charged to participants.
Among the top ranking plans were United Airlines, Bayer, Credit Suisse, Exxon Mobil, and IBM. Big Blue's plan stands out compared with offerings from most companies. It boasts $27 billion in assets, 92 percent employee participation among more than 100,000 US employees, and an average employee balance of $127,000, more than double the national average. The success of IBM's and other company-sponsored 401(k) plans can be attributed to four key driving factors.
How to Choose the Best Options for Your Company's 401(k) Plan
January 11, 2011
Despite this shortcoming, wider disclosure should serve to focus more attention on fees. And that could create pressure (say, from employees chagrined at how much they're paying) to drive costs down.
What can you do until the new rules take effect? Check with your HR department to see what expense data is available about your plan. If your account is accessible online, at the very least you may be able to get info about investment fees in the section that describes the plan's fund options.
Then go to brightscope.com. If your 401(k) is among the 55,000 that BrightScope rates, you can get a free estimate of how much you're paying in investment and administrative fees -- and how that total compares with a low-cost 401(k).
Don't let fees shrink your 401(k)
January 5, 2011
Ryan Alfred, the president and co-founder of San Diego-based BrightScope, a 401(k) plan information company which also helps advisors service the market, said his company has noted fast growth in the number of advisors who are outsourcing part of the 401(k) fiduciary responsibility to an investment manager.
"We believe this structure places the interests of the participants first and ensures that all critical services providers are operating as fiduciaries. I expect this approach to grow in importance as the large broker-dealer seek to find ways to allow their brokers to work with plans without being an investment fiduciary," Alfred said.
Buckingham Acquires 401(k) TAMP; DFA Ties Are Key In Its Retirement Push
December 30, 2010
The list of top funds compiled by retirement plan rating company Brightscope Inc. consists of those that attract the most 401(k) investor cash. Brightscope monitors 50,000 plans, which represents about 90 percent of the assets held in 401(k) plans
How Largest 401(k) Stock, Bond Funds Fared in 2010
"The 401k has become the most prominent retirement savings vehicle, with the majority of
Americans reliant on it for their future. There is a tremendous need for transparency in this
traditionally opaque marketplace, but it remains burdened with little visibility into underlying
plan construction," said Mike Alfred, CEO and co-founder of BrightScope. "That’s why
BrightScope created its BrightScope Rating system, the industry standard designed to align
participant and decision-maker interests and create clear, objective benchmarks for plan
performance."
Top 10 Stories from the Houston Business Journal Website in 2010, Ranked by Pageviews
December 28, 2010
The chances for a decent retirement go up in Richmond if you work for a big law firm or a tobacco conglomerate.
Assets in a retirement plan for employees at Fidelity Investments should shoot past $8 billion this year, underscoring the stock market’s recovery and the rich nature of benefits at Boston money management firms..."All of these (large Boston money management firms) are insanely profitable. They can put a lot of money into their plans", said Mike Alfred, Chief Executive of San Diego-based BrightScope, an Independent retirement plan ratings firm.
Retirement assets soar for Fidelity, other fund houses (REQUIRES REGISTRATION)
December 22, 2010
If your employer is serious about walking the walk to help you prepare for retirement, the folks in HR or the retirement plan committee on the Board of Directors should be willing to learn a thing or two from BrightScope's winners. In addition to offering low-cost index funds, plenty of BrightScope's top-rated plans also offer generous matching contributions. Aramco, for instance, matches 100 percent of the first 9 percent of employee contributions; the more typical match is 50 percent on the first six percent. That could be an interesting conversation starter.
How Good Is Your Company’s 401(k) Plan?
December 21, 2010
The quality of your 401(k) plan can have a big impact on your retirement savings. Overall costs of the plan matter, as does the breadth and quality of the investment options. The size of the employer match, if any, makes an enormous difference too in whether you’ll meet your savings goals.
BrightScope, a company that ranks 401(k) plans, recently analyzed those factors and several others to generate a list of the top 30 large plans for 2010. It analyzed a couple hundred data points across approximately 350 plans with more than $1 billion in assets using data that the companies have to file with the federal government. Then, it came up with a score for each plan.
Brightscope’s Top-Rated 401(k) Plans
December 21, 2010
As Tara Siegel Bernard at the NY Times points out, the list is full of airlines and health care providers like Amgen (AMGN). And it’s headed by Saudi Aramco.
But financial firms are represented in the list as well, including UBS AG (UBS) and Goldman Sachs (GS).
Top 30 Retirement Plans Rankings In 2010 Include UBS, ExxonMobil & IBM
December 15, 2010
Pensions are becoming quaint artifacts of yesteryear, replaced by company-sponsored retirement plans such as 401(k)s. Used effectively, these plans can help us build a solid financial future, but some make the process much easier than others.
The folks at BrightScope rate retirement plans at gobs of companies, and they've just released their 2010 list of the top 30 plans. In the typical 401(k) plan, an employer matches 50% of your contributions up to the first 6% of your salary, meaning that it will chip in as much as 3% of your pay. In comparison, here's what some of the top-rated companies' plans offer...
Who's in Line for a Better Retirement?
December 15, 2010
Southwest Airlines, Federal Express, Credit Suisse move up in rankings, according to research firm BrightScope
"The list looks like what you would expect; lots of big pharmaceuticals and big oil given that they are so profitable and have highly paid employees," said Mike Alfred, CEO and co?founder of BrightScope, when asked about surprises in this year's list. "People are surprised companies like Google didn’t make the list, which is only because they have not reached the $1 billion mark in plan assets as of their last filing, but Google will easily make, say, the top 20 plans next year."
Top 401(k) Plans of 2010
December 15, 2010
EMP ranked number one in top ten Cleveland area-based companies with the highest rated 401(k) plans containing more than $100 million in assets.
Charles Evans, Retirement Plan Consultant for Raymond James, Belden Branch, and the lead advisor responsible for advising the EMP 401(k)/Profit Sharing Plan, comments on the BrightScope rating, "In an industry that lacks global benchmarking, being able to demonstrate and measure plan performance and efficiency can be challenging. Having an independent third party like BrightScope assign a top rating to a 401(k) plan which we consult and manage is validation that we are attaining the high standards that we strive to achieve for each of our plan sponsor clients. Most importantly, it reveals that we are steering the plan on the right course, a course that ultimately benefits the plan's participants."
Top 10 Cleveland Area-Based Companies with the Best 401k Plans
December 14, 2010
This year's list of winners, compiled by independent datatracker BrightScope, is dominated by oil companies — the Savings Plan of Saudia Arabia — ranks at the top. Other finalists include ExxonMobil, Anadarko, ConocoPhillips and even BP.
"People might be surprised to see BP on the list," says Mike Alfred, CEO and co-founder of BrightScope. Since 2005, he says, BP has encouraged employees not to overload their portfolios with company stock. BP’s stock is down more than 20 percent since a major oil spill hit the Gulf Coast last spring.
Oil Companies, Airlines Offer Best 401(k) Plans
December 14, 2010
Despite the rough economic landscape of recent years, and the volatility, many of the nation's top companies remain committed, and competitive, with their 401(k) plan offerings.
BrightScope, a provider of independent retirement plan ratings and investment research, has crunched out its second annual Top 30 Ratings List covering 401(k) plans with more than $1 billion in assets.
...This year's list has the expected mix of oil, pharmaceutical, technology and financial services companies, BrightScope CEO Mike Alfred says.
"Those industries dominate the list," he says. "That speaks a lot to the profitability of those companies, as well as how highly paid people who work in those industries are."
Ranking Reveals 30 Best 401(k) Plans
December 14, 2010
Fundsters interested in the 401(k) side of business may want to take a look at today's news from BrightScope. This morning the San Diego, California based data specialists revealed their list of the top 30 401(k) plans of 2010, according to the BrightScope Rating system.
How Do You Pick the Best 401k Plans?
December 1, 2010
Two brothers have set out to make sense of the 401(k) universe with their company BrightScope.
...Thus began an incredible tale of American entrepreneurship, of a company busting open ugly secrets of the 401(k) business, of a company on the verge of transforming the business of advising 401(k) plans.
Ranking Retirement Plans
November 19, 2010
Entrepreneurs are benefiting from a shift in agency culture that has dramatically lowered the barrier to information. The Founders of Brightscope, for example, have uncovered dramatic price variation in the fees paid to manage retirement accounts for small businesses. Launched within weeks of the President’s Open Government Initiative, the firm now has access to data on 90% of all corporate 401(k) assets and a staff of 30 mining it for cost savings opportunities.
Government as Convener - Fostering Entrepreneurial Ecosystems
November 18, 2010
BrightScope uses government data to clarify 401(k) plans, and it's making money along the way.
What's the best story in Gov 2.0, when it comes to entrepreneurs using government data? Given the spotlight that deputy White House CTO Beth Noveck and US CTO Aneesh Chopra shone this week on San Diego-based startup BrightScope at the first International Open Government Data Conference and Politico's "Next in Tech" events, it looks like the Obama administration thinks it just might be the Alfred brothers.
The story of BrightScope: Data drives the innovation economy
November 17, 2010
The top 10 list compiled by retirement plan rating company Brightscope Inc. consists of the funds that attract the most investor cash. Brightscope monitors 50,000 plans, which represents about 90 percent of the assets held in 401(k) plans.
The funds on the list are among the most frequently offered by employers constructing 401(k) plans. And the mix of names isn't really surprising: There are three Fidelity funds, two Vanguard funds, two American Funds options and a Pimco bond fund.
Worthwhile? The most widely held funds in 401(k)s
November 13, 2010
Until now, it has been tough for participants to tally 401(k)-plan fees. When the new Labor Department rules kick in about a year from now, many workers should start seeing the actual dollar amount of fees deducted from their accounts. Plans also must explain what those fees are covering, whether it be individual expenses, such as loans, or administrative charges, such as legal and accounting services.
"The thing that will surprise people the most will be the noninvestment charges on there," such as fees that go toward plan audits or attorneys, says Ryan Alfred, president of 401(k) data provider BrightScope Inc. Workers will need to keep a close eye on their account statements, because some service providers may bill only once a year, he says.
The latest price cuts by Vanguard target the retirement market, an area where it is not top dog, say experts. The most profitable portions of retirement plans are the ones that would be likely to benefit from the price cuts.
"They clearly view the retirement space as an area where they have the most room to grow, and their strategy in the retirement market has been to go after the large plan sponsors," says Ryan Alfred, co-founder and president of BrightScope, which provides research and rankings on retirement plans. "That's where a few basis points can make a big difference."
For investors who can bear to peek at their 401(k)s, yearend is the time to reassess portfolios. To find out which actively managed mutual funds are the most popular, Bloomberg Businessweek asked independent 401(k) ranking service BrightScope to screen its database, which covers 50,000 plans—including 90 percent of all assets in 401(k) plans—and uses the most recent plan data, ranging from yearend 2007 to yearend 2009. The results listed some funds, such as large-cap Fidelity Contrafund (FCNTX), that reward investors with good risk-adjusted returns. In Contrafund's case, active management lifts it above the crowd. Others, such as small-cap growth fund Vanguard Explorer (VEXPX), are underperforming their benchmark indexes. Here's a look at the popular kids in three fund categories...
A 401(k) Funds Popularity Contest
October 25, 2010
In the meantime, until disclosure improves, there is an easy way to see what your employer-sponsored retirement plan is costing you.
A company called BrightScope rolled out a free service in 2009 that will rate your 401(k) plan. BrightScope has analyzed 50,000 retirement plans, which represents about 90% of the $3 trillion held in 401(k) plans.
BrightScope offers a free analysis called a Personal 401(k) fee report. It's a tool that breaks down exactly how much you're paying to have that 401(k) – in terms of a fund's overall expenses, administrative charges, marketing fees and so on.
BrightScope is the brainchild of two brothers – Mike and Ryan Alfred – and Dan Weeks, a veteran Hewlett Packard engineer who quit his job to work on a problem that has been plaguing millions of Americans: how to get better context around 401(k) plans and how they compare to other 401(k) plans. They got raw data (and I mean printouts) from the U.S. Department of Labor and built what they call the BrightScope rating.
Seeing a need to help 60 million Americans manage their $4 trillion dollars in retirement accounts, Mike and Ryan Alfred launched BrightScope in 2008. They headed to Washington, DC, to obtain electronic data on 401K plans from the Department of Labor. They assumed that since every employer is required to provide the government with this information, it would be readily available to any citizen.
But the brothers were wrong. Labor Department officials first said that they didn’t have these data; and when challenged, they offered to provide millions of pages of printed reports—at a cost of five cents a page. The entire data set would have cost a fortune, filled 1400 boxes, and been impossible to use. Undeterred, Mike and Ryan started a lobbying campaign. With the help of several Senators, they caused the government to relent and give them electronic copies of the reports they needed.
The Goldmine Of Opportunities In Gov 2.0
October 22, 2010
It's easy to be overloaded on Pimco. The Total Return fund is now in roughly 2% of all 401(k) plans with more than $2 million in assets, according to BrightScope Inc. The Wal-Mart Profit Sharing and 401(k) Plan has over $1 billion—or about 10% of its assets—in the fund, says Ryan Alfred, BrightScope's co-founder and president, who estimates that the fund is likely the single largest one in 401(k) plans today.
Do You Own Too Much Pimco?
October 18, 2010
But the latest salvo launched by Vanguard targets the retirement market, an area where it is not the top dog, experts say. And the most profitable portions of retirement plans are the ones that would likely benefit from the price cuts.
"They clearly view the retirement space as an area where they have the most room to grow, and their strategy in the retirement market has been to go after the large plan sponsors," says Ryan Alfred, co-founder and president of BrightScope, which provides research and rankings on retirement plans. "That's where a few basis points can make a big difference."
BrightScope estimates that Vanguard trails Fidelity in retirement assets by about $80 billion, making it the second largest manager of corporate defined contribution assets. But a few of its funds are among the most widely distributed in the 401(k) plan channel, including its Vanguard 500 Index and the Institutional Index, according to the firm's newly released research. In the areas Vanguard has targeted for price cuts — international, mid-cap and small-cap U.S. equity — the most widely distributed funds were American Funds’ EuroPacific Growth Fund and Fidelity’s Diversified International Fund.
"Finally, participants who for years believed their 401(k)s are free are going to open their statements and see that their plans are not free," says Ryan Alfred, co-founder and president of BrightScope Inc., which rates 401(k) plans. Ultimately, that should help put pressure on fund companies to lower fees. "This is the kind of bottom-up pressure the system needs to keep it honest."
The Government Accountability Office in a 2006 report criticized 401(k) disclosure practices. The report said increasing fees on an employee's $20,000 401(k) account by 1 percentage point could cut a plan's total value by 17% after a 20-year period.
401(k) Disclosure Rules Set To Go Into Effect In 2011
October 14, 2010
Many of us agonize over selecting just the right funds or whether to put 50% or 65% into stocks. Sure, asset allocation can have an impact on your bottom line, though it is partly a game of luck, depending on whether you catch a rally in one sector or another. Your first priority, though, should be determining how much you need to save and figuring out how to make that happen.
Unfortunately, compared with debating mutual funds, savings "is so unsexy that nobody wants to talk about it," says Mike Alfred, chief executive of Brightscope Inc., which rates 401(k) plans.
Are 401(k) participants putting their money into the best funds? Probably not, says Mike Alfred, CEO of BrightScope, a data firm that tracks 401(k) plans.
After analyzing 50,000 retirement plans, Brightscope identified the 10 most popular funds chosen by participants.
The list includes giant funds, such as American Funds Growth Fund of America (AGTHX), which has $151 billion in assets, Fidelity Contrafund(FCNTX), $68 billion, and Dodge & Cox Stock(DODGX), $40 billion.
Fundsters interested in distributing their offerings via 401(k)s may want to check out a new tool from BrightScope. Today the San Diego-based retirement plan data and ratings firm unveiled its first tool, Beacon, specifically for asset managers (DC I-O firms, i.e. defined contribution investment-only, in retirement industry lingo). The tool helps DC I-O managers keep track of where their funds are being used inside of 401(k)s.
A New Data Beacon Guides Fund Firms to 401k
October 12, 2010
In the past, these fund firms — which don't serve as record keepers to defined contribution plans — were able to determine how much was invested in their funds on a given record keeper's platform, but couldn't obtain information on specific funds, said Ryan Alfred, co-founder and president of BrightScope.
But with BrightScope's new Beacon analytics tool, Mr. Alfred said, asset managers can find out which retirement plans are using the funds, as well as the broker-dealer or adviser who sold the funds to the plan sponsor.
BrightScope Launches Tool for 401(k) Asset Managers
October 9, 2010
Many of us agonize over selecting just the right funds or whether to put 50% or 65% into stocks.
Sure, asset allocation can have an impact on your bottom line, though it is partly a game of luck, depending on whether you catch a rally in one sector or another. Your first priority, though, should be determining how much you need to save—and figuring out how to make that happen.
Unfortunately, compared with debating mutual funds, savings "is so unsexy that nobody wants to talk about it," says Mike Alfred, chief executive of Brightscope Inc., which rates 401(k) plans.
Yesterday, we took a look at five of the 10 most popular mutual funds in 401(k) plans across the country, based on a recent ranking from retirement plan rating firm BrightScope. Since these funds are raking in billions of retirement dollars, it makes sense to take a closer look to see if these funds are actually good options for investors or not. Today we finish our coverage by examining the five most popular funds in 401(k) plans. Read on, because there's a good chance one or more of these funds are in your retirement plan right now...
More Top Investments for Your Retirement
October 5, 2010
Recently, retirement plan rating firm BrightScope surveyed more than 50,000 employer 401(k) plans to create a list of the top 10 funds workers use for their retirement. But just because these funds are popular, does that mean they're a good bet for you? Let's count down the top 10 funds and see whether you should buy them in your retirement plan...
The Top Investments for Your Retirement
October 5, 2010
When it comes to managing retirement plans, Fidelity Investments is still America's biggest asset manager, according to Brightscope, which independently rates retirement plans. In an exclusive ranking for Reuters, Brightscope looked at retirement plan managers by the total value of assets in their funds in the corporate retirement market.
Fidelity leads in retirement plan assets
October 5, 2010
With the intent of giving investment managers a more transparent look at the funds within 401(k) plans, BrightScope, an independent provider of retirement plan ratings, announced Monday that it will offer fund distribution data and rankings for the 401(k) and defined-contribution industry.
BrightScope's database includes a detailed investment menu on more than 50,000 plans, representing nearly 90% of all the assets in 401(k)s.
"For years, the 401(k) industry has operated without comprehensive data on which funds and managers have the best distribution," says Mike Alfred, CEO and co-founder of BrightScope.
Crunching the Top Retirement Plan Funds
October 3, 2010
This is the first study to include such a large number of plans — 50,000 — across various record-keeping platforms.
The findings, which are based on audited plan financial statements from 2007 to 2009, indicate that most 401(k) plans stick to names that they know and trust, experts said. "There is a lot of group thinking among retirement plan advisers," said Ryan Alfred, president and co-founder of BrightScope. "People feel safer if they know their funds are in a lot of other plans."
The Most Popular Funds in the 401(k) Market
September 30, 2010
Let’s be serious. Understanding how your 401k is performing for you, personally can be confusing enough. But have you ever thought about how well your company’s 401k measures up against those of your competitors?
Neither had we, until we checked out BrightScope — a California-based Internet startup that’s helping people better understand the 401k landscape. Founder and COO Dan Weeks says BrightScope’s vision is “Millions more retiring with dignity,†and that’s something we can get behind here at PerkStreet.
“What people assume is that a 401k is a check mark for a company as opposed to asking, ‘How good is the plan?’ We enable you to see how competitive your company plan is,†he said, noting that 401k reports often don’t include details about the fees enrollees are paying. This is just one factor contributing to the widespread mis-understanding of corporate retirement plans by employees.
For many workers, the 401(k) is the only retirement plan they have. And that makes it all the more important that their 401(k) is a good one.
The differences between a good and mediocre plan — which might seem minor but add up over a 40-year career — can determine whether you'll enjoy comfy golden years or be forced to work longer to build an adequate nest egg.
Most people assume — wrongly — that the best 401(k)s are those that give workers access to funds with the highest returns, says Mike Alfred, chief executive of BrightScope, which rates about 55,000 plans on its site, brightscope.com.
The NFL Player Second Career Savings Plan is the highest-ranked 401(k) savings plan among Baltimore-area employers, a new study found.
BrightScope Inc. rates more than 50,000 401(k) company retirement plans nationwide. To prepare its local list, the San Diego company looked at plans with more than $100 million in assets offered by Baltimore-area companies. In coming up with its rankings BrightScope considered factors such as a plan’s cost and the quality of the investment options a plan offers.
“All of the plans on Baltimore’s Top 10 list have an above-average rating — something we have rarely seen in our analysis of plans across the country — and that bodes well for the region’s economic future,†BrightScope CEO Mike Alfred said in a statement.
The rating tool, which Brightscope first introduced last year, is based on a snapshot of data pulled from sources such as the U.S. Securities and Exchange Commission and the U.S. Department of Labor. In addition to assigning each 401(k) an index number, or rating, it compares each plan to other, like-sized companies with similar attributes, such as employee turnover.
Data is pulled from corporations' annual filings, though some companies have started updating the information more frequently to provide workers with the most current information, a Brightscope spokesman said.
"It's about empowerment. Most people stand around the water cooler complaining about fees and investments," said Brightscope co-founder Mike Alfred, 29. "What this allows them to do is point to an independent third party and put the power back in the hands of employees."
...The biggest asset most people have is their earning potential. Since you rely on your employer for your income, it's a mistake to double your exposure by owning employer stock in your 401(k).
Unfortunately, lots of people do exactly that. According to figures from BrightScope, 65% of ExxonMobil's (NYSE: XOM) Savings Plan was invested in Exxon shares, while the figures for Procter & Gamble's (NYSE: PG) plan was 43%.
3 Mistakes That Will Destroy Your Retirement
September 20, 2010
Who's got the best company 401(k) plan in town? Until recently, it was anybody's guess.
But now there's a little more light. In a new ranking of the largest 401(k) company plans in the Sacramento region, the Top 10 include two medical groups, an aerospace/development firm, a purveyor of electrical power transmission and a construction company.
At least that's the assessment of BrightScope, a San Diego-based firm that scrapes and crunches data from public and private sources to rate 401(k) plans nationwide.
In its first-ever ratings of large Sacramento-area retirement plans (with at least $50 million in assets), the achievers ranged from Sutter Medical Group (No. 1) to the McClatchy Co. (No. 10), parent company of The Bee.
If you invest with a company 401(k), you will have two major expense categories to worry about: administrative fees and investment fees. The administrative fees can be difficult to find. You'll need to look at the plan's annual report. The investment fees can usually be found by locating the expense ratio on each individual fund prospectus.
An easier way to examine your 401(k) expenses is to check out Brightscope.com and do a free search for your company's plan. They can usually give you a report detailing the 401(k) expenses you're dealing with and how your company compares to other similar companies. If Brightscope.com hasn't rated your plan yet or if you have trouble locating the fees on your own, ask your human resources department to help you identify the expenses.
This Investment Mistake Could Jeopardize Your Retirement
September 15, 2010
Start your comparison-shopping with Bright Scope, a service that rates and monitors 401(k)’s. If you see that your plan appears to be more expensive than similar plans (generally, the more the assets, the lower the total expenses), urge your employer to audit your 401(k) costs or hire a consultant to find less costly offerings. Employers may also be willing to pick up more of your plan’s expenses.
Pump Up a 401(k) by Lowering the Fees
September 14, 2010
The folks at Brightscope have crunched through the disclosures on 50,000 plans, uploaded some data and, best of all, rated employers against each other. Plans are rated on six factors, including employee participation, fees, investment mix and employer generosity.
Mike Alfred, BrightScope's chief executive, tells me he often hears from company HR departments who want to know more about the ratings, because they've been contacted by concerned employees. A well-informed work force is the first step toward making a plan better, Alfred argues:
"There are all kinds of shenanigans here (in the 401(k) universie). We can't solve those things overnight, but without any data or any transparency, we can't do anything at all."
Bryan Cave has the top-rated 401(k) plan in St. Louis
September 9, 2010
Gov 2.0 Summit 2010: Mike Alfred, "BrightScope: Data Fuels the Innovation Economy"
...Expenses for 401(k) plan vary widely between large and small plans. Data from Brightscope.com shows that average 401(k) total plan cost can vary from an ultralow 0.20 percent of assets for the largest plans to a whopping 5 percent for small plans....
Know what fees you're paying on your 401(k) savings account
September 4, 2010
I was on the phone with Mike Alfred when he told me how his young company is growing sales and landing big customers, like Lockheed Martin. I thought he had some interesting techniques, so I invited him to Mixergy to teach sales.
BrightScope, Mike's company, rates 401k plans. He’s a mentor at the Founder Institute, where he teaches some of the techniques he talked about in this interview.
BrightScope Teaches How His Startup Racked Up Sales – with Mike Alfred
September 3, 2010
Among the most strongly worded critiques came from Ryan Alfred, president of BrightScope, an independent provider of 401(k) ratings and analysis, and Joe Nagengast, principal of Target Date Analytics, which provides analysis and benchmarking of TDFs.
Although agreeing in concept with the SEC's desire for greater accuracy and transparency, they said the proposals don't go far enough and are "insufficient to fully protect investors."
"Retirement plan investors -- who account for roughly two-thirds (and growing) of all target date assets -- are the least likely candidates to evaluate additional graphs and charts before making a decision to invest in a mutual fund," they wrote.
Experts Square Off Over Target Date Funds
August 29, 2010
Over the past three years, Putnam's target date fund series has experienced fund turnover of 83.2%, according to data culled for InvestmentNews by BrightScope Inc. Meanwhile, MFS' target date fund family experienced turnover of 37.7%.
Target date turnover troubles big firms
August 26, 2010
Figuring out plan costs — never mind comparison shopping — has simply been too difficult for the average small-business owner. That helps explain why costs for small- company plans are all over the map. A 2009 survey by Deloitte Consulting found that for plans with fewer than 100 participants, the median all-in fee equaled 2.03 percent of plan assets, while 401(k) benchmarking firm BrightScope puts the figure closer to 3 percent. The price-finding game will get a little easier in July 2011, when new U.S. Department of Labor rules will require retirement plan providers to disclose detailed information about the fees they charge. In the meantime, here are steps you can take right now to comparison shop and make sure you're getting a good deal...
The 401(k) Cost Challenge
August 23, 2010
"In general, it's getting harder to do due diligence on these funds and know what the strategy is," said Ryan Alfred, president and co-founder of BrightScope. "This is something that you are supposed to hold on to for 30 years, but you have no idea what they are going to look like in three."
Moving target: Sky-high turnover in Putnam's TDFs
August 19, 2010
The team at BrightScope, Inc. in San Diego aims to change that, and has spent several years analyzing 200-some variables of about 50,000 401(k) plans in the US. The result, they claim, is a thorough and neutral assessment of each. "You want truly independent, third-party data," says Mike Alfred, co-founder and chief executive officer. Too often, plan sponsors receive performance information only from their plan providers...
How does your 401(k) stack up?
August 17, 2010
Amy Feldman of Business Week sets out to educate employees about the 401k plans of the future. She uses Brightscope as a measuring tool that employees can use to understand more about their work related savings plan...
Saving for retirement: How much is enough?
August 15, 2010
BrightScope, run out of San Diego, recently rolled out a list of the Top 10 Detroit-area based 401(k) plans. Now are these really the best in the area? Hard to say -- it's one group's opinion. And the way the 401(k) rules are written, there are many limits -- way too many, some argue -- on information...
401(k)-rating site is worth a look for information on plans
August 15, 2010
Financial advisers who charge by the hour and are equipped to serve small accounts also may fare well, said Ryan Alfred, co-founder and president of BrightScope, which rates 401(k) plans. "It wouldn't make a lot of sense for participants to be charged 1% fees on their assets," he said...
Advisers bullish on auto IRA measure
August 14, 2010
Figuring out if your plan is a weakling or a winner is notoriously difficult. But a San Diego-based company called BrightScope has created an independent retirement plan rating system to assess the health of 401(k) plans nationwide...
401(K) ratings system helps pick a winner
August 9, 2010
...Some self-directed brokerage accounts are restricted to mutual funds; others allow participants to invest in individual stocks and bonds, as well as mutual funds and exchange-traded funds.
"This gives sophisticated investors more options" than are available in a typical DC plan, said Ryan Alfred, president and co-founder of BrightScope Inc. San Diego, which rates 401(k) plans. The accounts also can mollify that small group of vocal investors in any plan who chafe at what they claim are limited choices, he said...
More plans offering self-directed brokerage accounts as an option
August 2, 2010
"Most of the time a collective trust is going to offer a good or better option than a mutual fund in a retirement plan because cost is such an important factor over time," says Mike Alfred, chief executive officer of BrightScope Inc., a San Diego-based provider of 401(k)-plan ratings and information...
Cheaper Choice in 401(k)s
August 1, 2010
...While about 50% of all retirement marketplace funds with 12(b)-1 fees charge 25 basis points, about 40% of fund share classes with 12(b)-1 fees in that marketplace have fees that are higher than 0.25%, according to data culled exclusively for InvestmentNews by BrightScope Inc. The highest 12(b)-1 fee is 1%, which occurs in 896 of the share classes, according to BrightScope...
12(b)-1 cap could zap Fidelity, other retirement fund providers
August 1, 2010
The desire for more low-cost investment options and greater fee transparency will break the inertia of ETFs getting on the 401(k) platform, says Mike Alfred, CEO and co-founder of BrightScope, an independent data analytics firm that quantitatively rates 401(k) plans.
"The 401(k) world is headed toward a full fee-disclosure system where participants and plan sponsors want to know upfront whether investments come with hidden fees," Alfred says. "ETFs are without hidden fees. As a result, we are going to see their popularity grow in the DC plan space. When you educate plan sponsors about the funds, they become enthusiastic about them."
When 401(k) plan sponsors have full access to funds' fees, they are going to realize ETFs are just a much better deal for plan participants, Alfred believes.
...Investors can always compare their funds against one of the handful of target-date indexes produced by companies including BrightScope Inc., Dow Jones Indexes, S&P Indices and Morningstar to see how they stack up based on returns...
How to Pick a Target-Date Fund
July 22, 2010
...Remember that you have a stake in this game -- this is your money, and your retirement. Start by looking at your fund's "glide path," says Ryan Alfred, president and co-founder of Brightscope, a company that rates 401(k) plans. "As you get closer to retirement, you should end up with a more conservative investment mix." The issue here is that every fund has a different glide path. Let's take two 2030 funds, which are intended for someone who is going to retire in the year 2030. The first could have 35 percent in equities when it hits 2030; the second could have 57 percent. If you're a conservative investor, you might not be comfortable with the glide path of the second fund...
Talking Money: 401(k) plans
July 22, 2010
...Your employer is required to deposit your contribution into your account within seven days of the payroll date, according to Mike Alfred of Brightscope. If your employer is taking longer than seven days to deposit your funds, and especially if they are taking more than 15 days, you should call the Labor Department immediately, he said...
Some employers steal from 401(k) plans
July 20, 2010
...For one thing, if you stay in your 401(k), you're limited to the investment choices within your plan. That may not be so bad if your 401(k) has a broad menu of decent investments that are reasonably priced. (To get an idea of how your plan's investment options stack up on price, check out the 401(k) fee reports available free from 401(k) ratings firm BrightScope.)
...The eventual disclosure of fees to employees is likely to cause more "consternation," says Ryan Alfred, the president of BrightScope, a company that rates 401(k) plans. "Most participants in 401(k) plans don't think they're paying fees," Alfred says. Only 26% of workers are aware they pay fees to participate in their retirement plan, according to a recent survey by the Transamerica Center for Retirement Studies...
A Step Toward 401(k) Fee Transparency
July 12, 2010
A big allocation of company stock reduces a company's 401(k) rating by BrightScope Inc., said Ryan Alfred, president and co-founder of the San Diego-based firm that provides plan ratings. "Most industry experts I talk to use 10%" as the cutoff point for a single asset in a portfolio, he said.
Some plans remain company-stock heavy
Employees may buy in out of loyalty or optimism, and employers often use company stock for at least a portion of their matching contribution for 401(k) and other direct-contribution plans. Monsanto's(MON) direct-contribution plan counts the company's own stock as its top investment holding at 50% of total assets, according to BrightScope, a provider of 401(k) ratings.
BP Stock Drop Erodes Retirement Accounts
July 8, 2010
...As of Jan. 1, BP stock made up nearly 30 percent of BP employee accounts, or about $2.45 billion worth of retirement savings, said Mike Alfred, CEO of BrightScope, a San Diego-based firm that rates about 50,000 401(k) plans. The legal argument likely will center on whether BP workers were allowed to take excessive risk by having too much money in company stock, Alfred said...
Pensions Weigh Options From BP Spill
July 2, 2010
As America's baby boom generation surges into retirement, there is a growing sense of apprehension that there won't be any nest egg waiting for them when they're ready to leave their jobs...Michael Alfred, chief executive of BrightScope, a San Diego firm that analyzes 401(k), IRA and other retirement plans, says investors have good reason to be concerned...
Facing retirement challenges
July 1, 2010
...Nine of the 10 most generous plans provide profit sharing contributions, including Ernst & Young and United Parcel Service. "While in these cases the profit sharing contributions are extremely generous, it is important to remember that discretionary profit sharing contributions can be very good when the company is doing well, and then disappear if the company has a bad year," said Eddie Alfred, vice president of research and data at BrightScope...
UPS high among US cos with big retirement matches
June 30, 2010
Mike Alfred, the chief executive officer of BrightScope, which rates 401(k) plans, agreed that there has been a trend towards auto-enrollment since 2006, but he is worried about plan sponsors auto-enrolling in target-date funds. "If you're not going to have a pension plan, but you still want your employees to have a retirement at some point you have to make sure that employees are participating in 401(k)s. It's a mathematical thing," he said. "But target date funds are a huge concern of the Department of Labor and the Securities and Exchange Commission right now both because of how they're marketed and the process used by employers to evaluate and choose the plans."
Auto-Enroll On the Rise, 401(k) Match Still on the Sidelines
June 15, 2010
Thanks to declining stock prices, cutbacks in employment benefits and rising management fees, 401(k) plans don't necessarily offer the secure retirement that they once did. But such local firms as the Anesthesia Service Medical Group, Scripps Clinic Medical Group, Sempra Energy and Qualcomm still manage to provide their workers with relatively strong 401(k)s, according to BrightScope, a San Diego firm that bills itself as the nation's largest independent provider of retirement plan ratings...
Some local firms earn 401(k) kudos
June 14, 2010
Administrative costs and fund expenses in employer-sponsored retirement plans such as 401(k)s can mean significant loss of wealth over a lifetime. An annual fee of 0.5% of assets can reduce your savings by 12.5% over 30 years, according to the Center for Retirement Research at Boston College. Those of you at smaller companies are likely to bear heavier costs. Fees for plans with $5 billion in assets average 0.62%; fees for plans with $1 million average 2.1%, reports BrightScope.
15 most hated fees
June 9, 2010
Wellington's 401(k) plan offers a variety of quality investment funds and charges low fees. The company contribution averages a whopping $19,500 per participant (including profit sharing worth up to 15 percent of an employee's salary). No wonder the plan boasts an impressive 98 percent participation rate. "For a plan that size, that's very high" participation, said Eddie Alfred, a vice president of BrightScope, a San Diego company that rates 401(k) plans. "Wellington has done a superb job."
Wellington's 401(k) plan ranks among best in area
June 5, 2010
"Rather than just sitting around the water cooler and saying, 'I think the fees are high' or 'The investments aren't good,' you can actually send them some actionable information," he says. "And, we're seeing that employers are making changes based on this information."
There's never been a time in history when investing information is so readily available, for free. You can go online right now and find out everything you ever wanted to know about proper asset allocation and diversification. You can also learn about about a particular investment class, company, and industry you're considering investing in. Check out a site like Brightscope.com, which will tell you how your company's 401(k) is performing compared to your peers. Armed with this knowledge, we can make smart choices about our retirement savings strategy.
5 Reasons to Start Investing for Retirement Today
May 31, 2010
Company 401(k) plans can range from the good the bad to the ugly - with high administrative fees or poor investment choices. Workers can now do something to boost their plan's value. The website BrightScope.com reviews and rates large company 401(k) plans. If your plan is ranked at the bottom, click "Help improve the plan" to get specific steps to make your firm's plan a better deal for employees.
Mike Alfred, one of BrightScope's co-founders, says trading costs can add an average 40 basis points on average-above and beyond the expense ratio-across 401(k) plans he's surveyed. In small funds that trade frequently, he says trading costs can double overall costs. Company stock ownership in a 401(k) can come with additional broker fees as well...
What Your 401(k) Really Costs You
May 24, 2010
...Most providers charged double fees -- one for the mutual funds, then a second layer of "wrap" charges to manage the assortment. As a result, research firm BrightScope says target-date fees are 10% to 25% higher than those of other 401(k) options. (According to Morningstar, Vanguard is the only truly low-cost provider, since it uses index funds with rock-bottom fees and doesn't impose those extra wrap charges)...
The senator who wants to save your retirement
May 17, 2010
...Goldman already has sold its funds to the 401(k) plans of companies including Intel Corp., Sun Microsystems Inc., and Sysco Corp., according to data compiled by BrightScope Inc., the San Diego-based 401(k) research firm. The most popular Goldman funds for 401(k) plans are Goldman Sachs Mid Cap Value Fund and Goldman Sachs Small Cap Value Fund, according to BrightScope...
Goldman Sachs Seeks Bigger Share of U.S. Retirement Savings
May 13, 2010
With so many opinions and analyses circulating about 401(k) plans, how much room is there for a pair of former registered investment advisers who are younger than the Internal Revenue Code section that spawned these plans?
Brightscope seeks to plug 401(k) information hole - and turn a profit
May 10, 2010
Alfred started his company at the end of 2008 with his brother, Ryan, and they've raised capital to expand. They received their first round of funding in January 2009, the same day the Dow Jones industrial average dropped to the lowest it has ever been. The second round of funding came later that spring. "BrightScope is unique enough that I can monetize the idea of rating retirement account programs, especially now that the pension plan has all but disappeared," Mike Alfred said...
Cutting-Edge Firms Take Conservative Steps to Stay Afloat
May 3, 2010
Do you know how much your 401(k) costs you each year in expenses? If your answer is "I have no idea", you are not alone. 401(k)s are famous for "burying" their costs. It is rare that you see actual fees listed on a statement (and if you do, the odds are that there are other expenses that you are also paying which are not listed.) So, how can you check up on how much your plan is currently costing you? A recently launched website (www.brightscope.com) lets you see exactly what kind of expenses you are incurring...
How much is your 401(k) costing you?
May 3, 2010
Houston-based Continental has $1.37 billion in defined benefit assets, according to SEC filings. In defined contribution assets, Continental has a combined $2.7 billion in three 401(k) plans, according to BrightScope, a firm that analyzes DC plans...
UAL, Continental combo creates $9.6B in retirement assets
May 2, 2010
...Annuities are uniquely suited to deliver on that mandate, says Mr Alfred. "We are generally supportive of helping participants creating retirement income streams," he says. "I am not convinced that anything other than an annuity can do this. People need income; they don’t need a lump sum in retirement." Still, selling annuities in retirement plans has been a tough slog for annuity providers...
Demand for income lifts annuity appeal
May 1, 2010
Now you can lift the veil on how much you really pay in 401(k) fees. Analytics firm BrightScope has launched a new, free tool, the Personal 401(k) Fee Report. Assuming that your company's 401(k) plan is among the more than 30,000 in the firm's database, you can get a customized estimate of how much your plan is costing you. (And if your plan isn't listed, you can ask BrightScope to add it.)
401(k) Tuneup
April 29, 2010
...Alfred adds: "The 401(k) market is actually getting bigger and bigger due to the decline in defined benefit plans. This trend has been going on for years. There will be more and more money going in to the 401(k) system than there is going out and if annuity-type features find themselves in to plans, the money will likely never leave." He has more faith in estimates of the 401(k) market published by the ICI, he says...
Some experts question Cogent Research study's finding of big dip in 401(k) plan ownership
April 26, 2010
...Unfortunately, it's difficult for most employees to do a reasonable cost comparison. One new tool that offers promise is BrightScope. If your employer is in BrightScope's database of some 30,000 plans, you can see how your 401(k) compares in terms of costs, investment menu, and options...
What Your Boss Isn't Telling You About Your 401(k)
April 23, 2010
...Your investment choices may be weighing you down. For mutual funds, for instance, stick to investments that offer a 1.5% annual expense ratio or less, say Kennedy. To compare investment fees within your company's 401(k) plan, check out BrightScope's free personal fee report. San Diego-based BrightScope is an independent financial intelligence firm that has rated more than 45,000 plans...
Paring Back So You Can Retire Comfortably
April 22, 2010
...Starting with the top 10-rated plans in New York, the lists will help employees find out what the best plans are offering their participants, say BrightScope founders Mike and Ryan Alfred, who announced the list on Wednesday. The lists will also make it easier for plan sponsors who want to benchmark their plan performance against those of competitors. They will also be of use to investment advisors looking to help companies better manage their plans better, the lists creators say...
How Does Your Employer's 401(k) Plan Stack Up?
April 22, 2010
"Someone has to draw the lines of demarcation that balance the competing interests of the various providers - insurance companies, mutual fund complexes, and unbundled providers - and ultimately provide a meaningful disclosure to participants that doesn't exclude fees that participants are actually paying," said Ryan Alfred, cofounder and president of BrightScope Inc., San Diego...
Defined contribution pros seek more guidance on fee disclosure
April 21, 2010
"First off, everybody knows that lists and ratings are popular. People just love that stuff," says Mike Alfred, the CEO of BrightScope, a 401k rankings and research company. "There are so many people in this country who won't be able to retire where they spent their working career. A lot of people have to consider if they can ever retire if they continue to live in Manhattan or San Diego."
Best places to retire: with so many lists, here's how to decide
April 21, 2010
Financial firms and law firms play a prominent role in offering the best New York City 401(k) plans, according to BrightScope Inc., a San Diego-based firm that rates DC plans using six broad categories ranging from fees to quality of investment choices...
BrightScope ranks 'best' 401(k) plans in New York City
April 21, 2010
...By picking and choosing the best-in-class managers for an open architecture customized target-date fund, managers can keep costs low, says Ryan Alfred, co-founder and president of Brightscope. "Most open architecture target-date fund managers do not receive compensation from the underlying investments and therefore do not have an incentive to have a more aggressive glide path," he says...
Rise of Customization in DC Plans Draws Consultants
April 17, 2010
...New tools are emerging to help investors weigh their options. BrightScope, a retirement-plan research firm, early this year introduced a "personal 401(k) fee report," which offers a quick snapshot of plan costs and how they'll affect a nest egg over the long haul. Users can then compare these costs to their IRA alternatives...
The Grudge Match Over Your 401(k)
April 13, 2010
Now you can lift the veil on how much you really pay in 401(k) fees. Analytics firm BrightScope has launched a new, free tool, the Personal 401(k) Fee Report. Assuming that your company's 401(k) plan is among the more than 30,000 in the firm's database, you can get a customized estimate of how much your plan is costing you. (And if your plan isn't listed, you can ask BrightScope to add it.)
401(k) Tuneup
April 11, 2010
...The San Diego startup takes data from annual reports that employers file with the government, puts it into a proprietary formula and rates plans on a scale of 0 to 100. The average rating is 58. It now rates about 35,000 private-sector plans nationwide, including more than 1,000 in the Bay Area. It publishes ratings and other information about each plan for free at Brightscope.com...Along with its rating, BrightScope publishes lots of other user-friendly data about each company's plan such as the average balance, top three investment holdings and ratings for a peer group of companies. Detailed financial data is available behind the Form 5500 tab...
How does your 401(k) plan rate?
March 30, 2010
...Mike Alfred, chief executive at BrightScope, an independent provider of 401(k) ratings and financial intelligence to plan sponsors, advisors, and participants, said in a recent phone interview that the confidence men show in investing is usually an over-confidence. "Which is why a lot of studies say that women are really better investors than men because men are trying too hard to beat the market which as most people are now aware is a fools game," he explained...
Where Are All the Women on Wall Street?
March 30, 2010
...If you have any doubt as to just how serious a barrier high expenses in a 401(k) or similar plan can be, I suggest you take a spin over to Brightscope.com, a site that rates 401(k) plans and offers free personal 401(k) fee reports. If your plan is one of 30,000 or so Brightscope has info on, you'll not only see the fees you're paying for your plan, but also get a projection of how much those fees might whittle down your eventual account balance...
401(k) plans have been around since section 401(k) of the Internal Revenue Code was enacted into law in 1980. Almost 30 years later the data for these plans is still an archaic mess. BrightScope, the San Diego startup, burst onto the scene in January 2009 with its sights set on "helping millions retire with dignity," by giving them the information they need to understand their plans, according to Ryan Alfred, BrightScope's president and co-founder. Alfred and his team have done the manual-data-entry dirty-work for 401(k)s, and on Tuesday Alfred gave us a tour of how BrightScope has made sense of all those dusty boxes of data...
How BrightScope is Using Technology to Create Order in a Messy 401(k) Market
March 16, 2010
...That much of a savings on fees could increase account balances by tens of thousands of dollars over the working years of the average saver...Companies are required to act prudently in selecting and managing investments in retirement accounts. That standard has caused many companies to look around. "If others are using CITs to lower fees and you're not, you'd better justify why not," said Ryan Alfred, president of BrightScope Inc., which analyzes and rates 401(k) plans...
A Low Fee Option May Be Coming to a 401k Near You
March 16, 2010
...A new job might increase your pay, offer better benefits, or provide a 401(k) plan with better investment options. The following ratings from BrightScope.com reveal huge disparities in the quality of many prominent employers' retirement plans...
The Hidden Upside of Job-Hopping
March 4, 2010
...Brightscope isn't the first to measure 401(k) performance but it's gone deeper than most by accessing the audit reports that all plans file with the U.S. Department of Labor, as well as other data sources. Currently, Brightscope offers ratings on 35,000 plans, covering more than 60 percent of all employees and more than half of all assets in plans. "We want to make the data much more transparent," says Mike Alfred, Brightscope's CEO and co-founder. "The fact that it took a little start-up in San Diego to pull out this data in an industry that has been around for 25 years tells you just how inefficient the market is."...
Brightscope shines a new light on 401(k) fees
March 4, 2010
If you think target date funds are the best place for your money, you might want to think twice, says Michael Alfred, of BrightScope.
The Truth About Target Date Funds
March 3, 2010
...Investors in target-date funds with a retirement day of 2010 found out how different the results could be during the stock market's recent collapse. Some investors lost as little as 10 percent, while others lost four times that much, says Mike Alfred of BrightScope, a 401(k) retirement plan rating service. "I don't think they expected that given they were only a few years from retirement and were in a fund that was supposed to automatically adjust - they didn't expect to lose that much money," Alfred says...
Partner In Time: Retirement Funds You Can Age With
March 3, 2010
...I asked Mike how readers should go about using BrightScope. He suggested the following: (1) visit BrightScope and determine how well your company plan is performing; (2) determine how much in expenses you are paying; (3) share your rating information with your company's HR department and ask about improving your rating; (4) leave comments on BrightScope.com for others to read...
How Good is Your 401K? Ask BrightScope
March 1, 2010
...Whether or not your 401(k) plan's money fund is a money loser depends on how the plan allocates its expenses, says Ryan Alfred, president of BrightScope, which tracks 401(k) plans. Some funds, for example, simply charge participants a flat fee for their 401(k). Others levy the fee on the plan's overall assets, which could push a low-yielding fund below zero...
How you can lose money in a money fund: Fees
February 26, 2010
...But Mike Alfred, chief executive at BrightScope, an independent provider of 401(k) ratings and financial intelligence to plan sponsors, advisors, and participants, said Wednesday that the confidence men show in investing is usually an over-confidence. "Which is why a lot of studies say that women are really better investors than men because men are trying too hard to beat the market which as most people are now aware is a fools game," he said...
Survey: Women Less Confident When it Comes to Investing
February 26, 2010
...Observers predict that the fund industry will weigh in heavily on this issue during the comment period since it could have huge effects on actively managed funds. "It means that actively managed funds in the retirement marketplace would very much be in question and could lose market share," said Ryan Alfred, co-founder and president of BrightScope Inc., which rates 401(k) plans...
Labor Dept.'s 401(k) proposal could rock pension advice business
February 24, 2010
...While the federal government is debating how to improve fee disclosure, the private sector has stepped in. BrightScope.com, a San Diego startup that rates 401(k)s, has launched an online tool that gives you a free personal fee report. So far the company has expense data for 31,000 401(k)s, which cover more than 50% of participants. Once you register and supply information about your investment choices, click on "fee details" to find out the estimated percentage of your 401(k) that you are paying in expenses each year...
Make the best of a bad 401(k)
February 23, 2010
...BrightScope Inc., which rates company 401(k) plans, projects that by the year 2020, target date funds will hold more than $2 trillion and represent a third of all 401(k) assets. The current discontent over target date funds stems from their dismal performance during the 2008 market meltdown -- particularly for investors closing in on retirement, who saw their nest eggs drop by 25 percent or more...
Your 401(k): Target Date Funds Disappoint
February 18, 2010
...BrightScope's rankings are based on total plan cost, the size of the company match, the quality of the investment choices offered, how many employees participate and how much they save, among other things. "The biggest problem is fees," Alfred said. There's a "huge divergence, particularly at the small end of the market," he said. "Coupled very closely with that is the fundamental lack of transparency and disclosures. ...That's why you see two companies in the same industry, with the same demographics -- and one has fees twice as high," he said...
How well is your 401(k) plan serving you?
February 18, 2010
...LCM Capital Management, a Chicago based Registered Investment Advisor, announced today that it has selected independent 401k data firm BrightScope to provide its clients and prospects with unbiased third party benchmarking on fees, investments, and performance. BrightScope's proprietary data and 401k benchmarking tools will allow LCM Capital Management to provide retirement plan sponsors with total transparency into the underlying costs and performance of their retirement plans. LCM Capital Management is the first Chicago area investment advisory firm to utilize BrightScope's tools for advisors. ...
LCM Capital Selects BrightScope to Provide 401k Fee Benchmarking to Chicago Area Plan Sponsors
February 18, 2010
... A San Diego startup called BrightScope Inc. last month launched a free service that lets retirement-plan savers, even at many private companies, look up a detailed rating of their company plan. The service rates plans on 200 data points covering costs, investment choices and company match generosity...
Controlling Retirement Plans
February 12, 2010
...Within weeks of launching the site in January 2009, the brothers had phone calls from the largest plan sponsors in the country, some infuriated by their ratings. Now many of those companies are clients - BrightScope makes money by selling more advanced rating software to companies. "It was like throwing match into the oil," Mike Alfred says...
Sites That Help You Fight the Fees
February 9, 2010
The BrightScope 401(k) plan ratings service is skewering the Investment Company Institute over its defense of target date funds...BrightScope responded to the ICI's paper, attacking each of the points the ICI made. "The ICI list misrepresented many of the basic facts about target date funds and painted an overly rosy picture of the target date fund marketplace," the firm states in its blog posting. "This paper intends to set the facts straight."
ICI slammed over target date defense
February 2, 2010
...At the same time, employees are starting to get more competitive information about their 401(k) plans. One company, Brightscope, publishes ratings on thousands of company plans and includes competitive information about the specifics. Plan participants can go to that Web site and see how much more (or less) they would be able to save if their plan were better or worse...
The Return Of The 401(K)
January 28, 2010
Mike Alfred graduated Stanford University in 2003 and like many jumped into the financial field. He spent years working as a financial advisor and investment manager at several firms including his own, Alfred Capital Management. However he had always had an itch to be a web entrepreneur and with the help of a little Maker's Mark and Monday Night Football that became a reality?
How Mike Alfred and Brightscope are Taking on a 3 Trillion Dollar Industry
January 26, 2010
...A new offering by BrightScope Inc., a 401(k) plan ratings and research company, can help you analyze your own 401(k) fees. The online calculator allows you to plug in mutual fund information and get a free report within minutes. BrightScope's analysis and ratings tools thus far have primarily helped HR departments compare plan features and services, but this calculator is designed for employees...
How Much Are You Paying? A Guide to 401(k) Fees
January 22, 2010
...A San Diego company called BrightScope, which rates more than 30,000 401k plans, now has a Personal 401k Fee Report -- and it's free...In fact, the AARP says 83% of plan participants don't know what they're paying in 401k fees...
What does your 401k plan really cost?
January 22, 2010
..."A lot of people might think, 'Hey, it is only 2% -- that is a small amount,' " says Ryan Alfred, co-founder and president of BrightScope. ``But if your expected rate of return is 8%, and inflation is 3%, you've only got 5% of real return for yourself every year, and you are giving up 2% of that. You are giving up 40% of your return every year."...
Fees Damage Savings More Than Stock Slump
January 20, 2010
...Brightscope is an independent service that provides detailed information about 401(k) plans. It just announced a new, free service that permits participants in 30,000 rated 401(k) plans to determine how much they are paying for the investments they have made in their personal 401(k)s. You simply identify the plan, answer a few questions about your investment options, and Brightscope will compute your total cost. It will also compare your costs to the average fee for a low-cost IRA investor and calculate the impact of the difference on your average balance over time...
Find Out the Hidden Costs of Your 401(k) Plan ... Free
January 19, 2010
San Diego based BrightScope, recently launched to help people navigate their 401k retirement plans and how to maximize the benefits. Today, the startup is launching its Personal 401k Fee Report that will let participants can figure out exactly how much they are paying in fees in their specific plan...
BrightScope Launches Personal 401k Fee Report
January 19, 2010
..."What better way to win rollover business than to show clients how much they would save through rolling over their 401(k) plan assets to an IRA," Mr. Alfred said. "Also for advisers working with 401(k) plans, this is a great tool to get employees and plan sponsors to understand the fees."...
Brightscope launches 401(k) fee tool for advisers, investors
January 19, 2010
...More than 80% of plan participants have no idea what their 401(k) charges, an AARP survey found. That may be about to change. BrightScope, a San Diego start-up that rates 401(k) plans, has just launched its Personal 401(k) Fee Report tool, which allows investors to quickly determine their plan costs-everything from fund expense ratios to plan consulting fees to administrative charges...
Finally! Your hidden 401k fees revealed
January 18, 2010
..."Plan sponsors and advisors are going to be looking for more data, better metrics to select and monitor their target-date funds...They're looking for new ways to do it," Ryan Alfred, co-founder and president of San Diego-based 401(k) ratings firm, BrightScope, told FA. He pointed out that while it's important to look at performance, there are other factors that must also be considered when evaluating target-date fund families - including whether the fund goes "to retirement or through retirement," internal conflicts of interest, and fees...
T. Rowe Tops Russell's First Ranking of Target-Date Funds
December 30, 2009
With its vast, free database, researcher BrightScope could alter the retirement landscape as much as Morningstar changed funds...
How Good Is Your 401(k)?
December 22, 2009
Brightscope Hits the Big Time - Although created in 2008, this San Diego-based 401k plan data and analytics firm really exploded into the arena in 2009...Their unique and objective rating techniques have caught fire among plan sponsors. With their recent ranking of the top 30 best 401k plans among the top stories in December, who knows what the future holds for this innovative company...
Top Fiduciary Stories in 2009
December 22, 2009
Many funds, including Fidelity's target-date funds, assume that an investor will not liquidate such assets during retirement. "It's very smart that Fidelity is discussing this," said Ryan Alfred, co-founder and president of BrightScope Inc., a 401(k) ratings and analytics firm. "I think this is the direction that the marketplace has to go."...
Fidelity eyes adding rivals' target-date funds to its 401(k) mix
December 21, 2009
BrightScope Founders Mike and Ryan Alfred break down what companies have the best retirement plans.
(Video Interview)
Companies With Best 401(k) Plans
December 14, 2009
...If anyone is poised to capitalize on the Latino 401(k) marketplace it's the insurance companies," explained Mike Alfred, CEO of BrightScope, an independent provider of 401k ratings and financial intelligence to plan sponsors, advisors, and participants. "Insurance companies already provide more services and charge more, which is part of their value proposition. And, they offer language support, which is one of the key things you need to break into the Latino market."...
Latinos: The New 401(k) Market Opportunity?
December 14, 2009
How Does Your Plan Rank? Is my 401(k) any good? Is it terrible? How does it stack up? Those are the questions that many employees invested in their company's retirement plan want to know, especially after the rollercoaster ride of the past year. To answer them, we turned to San Diego-based BrightScope, a startup company that has been analyzing -and rating- the nation's corporate 401(k) plans...In this slideshow, we've culled the ratings by sector, showing you the best and worst 401(k) plans with at least $100 million in assets, among the more than 26,000 such plans that BrightScope rates, in 17 major sectors. We also show the runner-ups for those titles of best and worst...
The Best and Worst 401(k) Plans by Industry
December 13, 2009
..."One thing we saw from our work with target date funds this year is that people are getting used to the idea of having a 401(k)," said Ms. Glacel, who acts as a spokeswoman for the committee. "But what do those people do when they take that money out after they retire?" The committee is expected to hold hearings in the spring to examine the various products and proposals that are designed to help retirees live off their savings. Mr. Kohl's campaign to regulate target date funds is up against significant opposition.The mutual fund industry represents a powerful lobby that might stifle his attempts, experts said. "The Department of Labor might come out with guidance about how 401(k) plan sponsors can effectively carry out their fiduciary duty with regard to target date funds," said Ryan Alfred, president of BrightScope Inc., a 401(k) ratings and analytics firm. "But I don't expect the SEC to do anything." ...
He gets riled about risk
December 10, 2009
BOSTON (TheStreet) -- Lockheed Martin, Southwest Airlines, IBM and Chevron are among companies that offered the best 401(k) plans this year. BrightScope, a service that offers retirement-plan ratings and investment research, calculates its reviews with data from plan sponsors, the Department of Labor and the Securities and Exchange Commission. Its ratings system analyzes more than 200 factors and determines a score. Among criteria are plan costs, company generosity, participation rates, salary deferrals and investment-option quality...
America's Best 401(k) Plans of the Year
December 9, 2009
...A long-term investor in a 401(k) plan that charges 1.5% in annual expenses is likely to end up with a 20% smaller nest egg than someone in a plan that costs 0.5%, according to a GAO report. Does your 401(k) charge that much or more? Unfortunately, it's tough for you to know now, since total costs, which include fund expense ratios and administrative charges, are often poorly disclosed. Legislation has been introduced in Congress to address the problem, and the Labor Department is expected to release new rules in early 2010 requiring greater transparency about fees. But don't wait for the feds to act. Check out how your plan stacks up against others in its industry at Brightscope.com, a new, free 401(k) service that evaluates more than 15,000 plans on factors such as fees, investment choices, and company matches...
Get your 401(k) above pre-crash levels
If you've never looked closely at your 401k plan, you're not alone. Endless streams of fine print and complicated fee schedules make it difficult for even the savviest of personal finance gurus to understand many of the plans offered by employers these days. Brightscope aims to fix that, though, by introducing transparency to the retirement plans that millions of Americans rely on each year. By using Brightscope's unique ratings system -the first of its kind for 401k plans- employees can find out what their plan really entails and compare it to others that are available...
Brightscope - Rating Your 401k
November 18, 2009
Few investors know what they're paying in administrative and other fees for their 401(k), but there are ways to find out, says Ryan Alfred, president of BrightScope, a retirement-plan ratings and research firm. MarketWatch's Andrea Coombes reports.
There's a lot of debate about whether 401(k) plans are failing American workers. Publications ranging from CBS MoneyWatch to Time Magazine have reported on their relative failings, as well as on some of the success stories. But there's no doubt that some plans are dogs-failing every employee forced to deal with them. These plans have high costs, poor investment options and stingy matching programs, said Mike Alfred, a San Diego money manager and founder of a 401(k) plan rating service called BrightScope. Some of them also fail to get workers to contribute, which means those workers will have less at retirement age and may have to work longer...
Is Your 401(k) a Dog or a Darling?
November 16, 2009
...OUTSIZED EXPENSES - The final difference will not surprise anyone remotely familiar with the mutual fund industry: they tend to be far too expensive. Most target date funds are "funds of funds," which means that the funds themselves have no true manager; their assets are simply invested in a handful of the firm's other mutual funds. There's no additional layer of value added in target date funds, and the manager is being compensated for their services via the expenses charged in the underlying funds. But this doesn't stop most managers from double-dipping. According to Lipper, an amazing 908 of 992 target date funds levy an additional fee on their target date funds, over and above the fees charged by the funds it invests in. Even worse, an analysis by BrightScope of target date funds in retirement plans found that these funds were 10 to 25 percent more expensive than the other core funds that were offered in retirement plans. Assuming that the Department of Labor wasn't interested in finding a way to increase mutual fund managers' revenue, they might want to consider amending their endorsement of these funds, dictating that only target date funds that limit their expenses to those charged by the underlying funds can be used as default investments in retirement plans...
Navigating the Flaws of Target Date Funds
November 14, 2009
MONEY - EVALUATING YOUR 401(K): Yes, your nest egg has taken a hit in the past year. That much is clear. But how does your company's 401(k) stack up against other savings plans in your industry, or around the country? Check out BrightScope Inc., based in San Diego, which evaluates employers' retirement offerings. Started in 2007, the company has rated about 7,000 plans, covering about 22 million workers, with the goal of enhancing "the transparency of 401(k) plan performance and fees for plan sponsors, advisers and participants." Some of the ratings are a bit broad ("average," "poor"), but the service offers a good snapshot of many retirement plans and their components. To learn more, visit brightscope.com.
The Best In...
November 12, 2009
...Understand Your Plan. Step one is to take a look at your plan's investment offerings. It's almost always a bad idea to hold deferred annuities in retirement accounts; if yours contains one, that should be a warning sign. If instead it offers plain-vanilla mutual funds, see how they stack up at places like Forbes.com, which rates funds based on up- and down-market performances. Also inquire about whether your plan has a self-directed brokerage option. Administrative and transaction costs may still apply, but at least it will allow participants to pick their own funds and other securities. If you use a personal financial advisor different from the one servicing your 401(k), ask what he or she thinks of the plan. Research the plan at BrightScope.com. Launched in January, it provides ratings for 15,000 plans free of charge (some data on costs, employer matches and participation rates require a subscription). General Motors, which doesn't match hourly employees' contributions and has an average total plan cost of 0.87%, receives 51 out of 100 points; Lockheed Martin ( LMT - news - people ), with a $3,266 average match and cost of 0.41%, rates an 81...
Fixing Your 401(k)... Think your employer's retirement plan is a dud? Here's how to push for a better one
November 11, 2009
A memorandum filed by plaintiffs in support of the settlement says Caterpillar would detail specific fees charged to participants. Transparency can be transforming, but the devil's in details, cautions Michael Alfred, co-founder of Brightscope, which rates 401(k) plans...
Caterpillar Suit Could Lower 401(k) Fees
November 10, 2009
On November 2, 401k Ratings Firm BrightScope announced it was partnering with Target Date Analytics LLC to promote a new index: the BrightScope On Target Index. The intention is to establish a national standard target date benchmark for the 401k industry. The San Diego, Calif.-based 401k data and analytics firm BrightScope, which rates 401(k) plans, went live in January and now has more than 16,500 plans in its database. BrightScope co-Founder and CEO Mike Alfred graciously consented to an exclusive interview with FiduciaryNews in between meetings in Washington DC...
Exclusive Interview with BrightScope, Inc. Co-Founder Mike Alfred on Rating Target Date Funds.
November 8, 2009
...The issue is that the top 401(k) record keepers dominate the target date fund market, critics said. In response to hearings held Oct. 28 by the Senate Special Committee on Aging on conflict-of-interest issues associated with target date funds, the Investment Company Institute said a statement: "Plan sponsors can choose whether or not to use target retirement date funds offered by the plan's record keeper." But non-proprietary funds are rarely chosen, according to research conducted exclusively for InvestmentNews by BrightScope Inc., a 401(k) data and analytics firm...
Smaller players foundering in target date fund market
November 2, 2009
SAN DIEGO, Calif. (AP) - Retirement fund ratings company BrightScope Inc. said Monday it has partnered with consultant Target Date Analytics LLC to design a Web site to help investors track the performance of target date funds. These types of funds, also known as lifecycle funds, typically become more conservative as the investor approaches retirement... ...The new product, the BrightScope On Target Index, is designed to help 401(k) plan sponsors, advisers and investors measure the performance and risk of their target date fund, said BrightScope CEO Mike Alfred. He said some companies offering target date funds were caught holding more stocks near the retirement date than was prudent. One reason is that companies can charge a higher expense ratio in equity funds than bonds funds, making stock funds more profitable, Alfred said. The target index will give participants a way to see how accurately a target date fund is meeting goals outlined in its plan documents...
BrightScope, Target Date Analytics Form New Index
November 2, 2009
BrightScope, a San Diego, Calif.-based 401(k) data and analytics firm, announced on Monday a partnership with Target Date Analytics LLC to launch the BrightScope On Target Index. Effective today, plan sponsors and advisers who sign up to use BrightScope's online tools to compare their plans' performance to others will now also be able to benchmark the target date funds within their plans. BrightScope, which rates 401(k) plans, went live in January and now has more than 16,500 plans in its database. Adding a target date fund index for subscribers makes sense given how prevalent these fund are in 401(k) plans, said Ryan Alfred, co-founder and president of BrightScope...
BrightScope launches target date benchmark tool
November 2, 2009
...Many of the most respected investment managers, investment committees, investment advisors, investment stewards, trust companies and record keepers already rely on Target Date Analytics' target date research, data, and indices. "We've worked with Target Date Analytics for several years and been very impressed," said David Hand, CEO of Hand Benefits & Trust. "BrightScope is a leading provider of 401k data and analytics and I'm confident this new partnership will be beneficial for the industry." The BrightScope On Target Index gives 401k market participants the ability to see how accurately a target date fund lives up to its stated goals as outlined in the prospectus. Unlike other target date indexes, the BrightScope On Target Index considers actual participant behavior when determining the appropriate asset allocation for participants approaching retirement. Industry adoption of the BrightScope On Target Index will help improve participant outcomes and ensure retirement income security...
401k Ratings Firm BrightScope Partners With Target Date Analytics to Unveil the BrightScope On Target Index
November 2, 2009
...In the meantime, there's BrightScope. Using public Form 5500 data and other sources, this startup gathers the information, crunches the numbers, and assigns single-number scores to the 401(k) plans of more than 4,500 companies...Ratings take into account factors such as investment menu quality and plan design, as well as performance issues like participation rate and average account balance which are of interest mostly to professionals like ourselves...
Throwing a Wrench in the Fee Machine
October 29, 2009
How good is your 401(k) plan? If you're like most workers, you probably don't have a clue. But now there's a free service to help you figure out how your retirement savings plan stacks up. BrightScope, an independent 401(k) ratings and analytics firm, relies on public documents to grade 401(k) plans based on such things as their administrative costs, investment returns and expenses, and company contributions. It uses the information to come up with a single score between 1 (poor) and 100 (excellent). For example, Google's 401(k) plan scored an 80, based on its low fees, generous company match and great employee-participation rate. But it lost points for its below-average investment menu and the so-so account balances of its workers...
Rate Your 401(k) Plan
October 28, 2009
...The criticism of the 401(k) as the primary retirement savings method for a majority of workers has grown with the stock market crash and account losses. Some critics want the voluntary savings plans to be replaced by a government-run retirement system. Others suggest adjustments to the 401(k) that make them less susceptible to market losses. The 401(k) itself shouldn't be blamed, however, said Mike Alfred, the CEO of Brightscope Inc., a Web-based 401(k) ratings service. "People are going to say if they oversimplify things, that it's a failure of the 401(k) plan, but in reality it's an issue of the failure of our educational system to incorporate financial literacy for kids at a young age," Alfred said...
Half of workers changing jobs cash out 401k
October 27, 2009
...To benefit, you must participate. Some statistics always amaze me, and one is that at many companies, participation rates are terrible. Sometimes, there are obvious reasons -- Starbucks (Nasdaq: SBUX), Convergys (NYSE: CVG), and Yum! Brands (NYSE: YUM), for instance, all have low participation rates, according to 401(k) tracker Brightscope. And that's not surprising -- Starbucks stores, Convergys's call centers, and Yum's KFC and Taco Bell locations all employ lots of lower-wage part-timers and young folks, and they tend not to be avid retirement savers. If that describes you, be the exception to the rule: Starting early pays off big...
5 Retirement-Trashing Moves
October 27, 2009
The Senate Committee on Aging will look into potential conflicts of interest and high fees in target date funds, with Michael Case Smith, Avatar Associates; Mike Alfred, Brightscope CEO; and CNBC's Sue Herera
...Nearly half of employees withdraw their 401(k) savings when leaving one company for another. Big mistake. "People don?t realize that they don?t have to cash out," says Mike Alfred, CEO of BrightScope, a 401(k) rating site. "We call it 'leakage.' They could roll the money into a new 401(k) or IRA"...Your benefits department should be able to get you fee information, but also check BrightScope?s "Total Plan Cost" for your company to see how its 401(k) fees (which you are paying in addition to fund expense ratios) compare with the universe of plans...
The 12 Dumbest 401(k) Mistakes
October 25, 2009
A few weeks ago, the committee asked BrightScope Inc., a 401(k) ratings and analytics firm, for data on how much target date funds cost, compared with other investment options within 401(k) plans. "We ran those numbers across the 15,000 plans in our database, and it came up that target date funds were 10% to 25% more expensive than other funds in the core menu," said Ryan Alfred, co-founder and president of BrightScope....
Senate to address conflicts in proprietary target funds
October 23, 2009
How does your 401(k) stack up to other retirement plans?
(Video Interview with Mike Alfred, BrightScope CEO)
Comparing 401(k)s
October 18, 2009
As you might already know a 401(k) plan is something that was designed for workers in the United States of America to save money for their retirement. One particularity about this plan is the fact that it gives workers the chance to have their savings invested while they postpone the taxes they have to pay for their money and earnings until they retire. In this way, employees have the possibility to decide if they will get a part of their salary paid directly, or if they will move it to their 401(k) account. The BrightScope RatingTM is a system that was developed in order to rate different 401k plans. This solution will help you to know which the best 401k plans are because it was created in association with the most important independent fiduciaries, as well as highly qualified finance professors and many 401k experts...
BrightScope.com - How To Get A Better Retirement Plan
October 17, 2009
...But the move toward employer decision-making can present risks for participants. The steps are driving more savings into target-date funds, which hold a broad mix of investments and become more conservative over time. Many target-date funds were walloped last year in the market slide, sparking scrutiny from lawmakers and regulators. The Senate Committee on Aging this month plans to examine fees, risks, and potential conflicts of interest in these funds. In a recent analysis of investment options in nearly 13,000 plans, 401(k) data and analytics firm BrightScope Inc. found that expenses charged by target-date funds are significantly higher than those levied by other funds on plans' core investment menus...
Employers Begin Driving Your 401(k)
October 16, 2009
I recently attended a conference in New York City featuring some leading financial services technology providers. For my retirement planning audience here at About.com, one seemed immediately worth sharing: Brightscope. Free for consumers like you to use, Brightscope allows for a "Morningstar-like" visibility into your corporate retirement plan. While not every plan has been analyzed, the database is already quite extensive and continues to grow. Use the database it to compare your current employer's plan to an old plan or even, one day, to a potential new employer's plan. Information is power and Brighscope is doing a great deal of work to increase transparency in your fund options and fees. Given that you often have very little say as to what you are offered, this is an important initiative...
Michael's Retirement Planning Blog
October 15, 2009
BrightScope, the brain child of two investment managers and a former engineer at HP, allows you to look at your company's plan in a way that was not possible previously. Designed to help human resource departments make good choices about plans, BrightScope seeks to give these folks some sort of benchmark to judge how their plan is run and how their employees access it and use it. BrightScope realized that "because benefits data has been controlled by a small group of companies that are not incentivized or governed by the same fiduciary standards that a plan sponsor must honor" difficulties in determining which is the best plan to offer their employees was not possible...
Shining a Light on Your 401(k)
October 13, 2009
...At one $54 million construction company in Idaho, the company's founder runs the plan. His main qualification? Four decades in construction. Ultimately, these people have authority over which funds will be offered, what fees employees will pay and how much education and advice workers will get - the kind of features that dictate how each worker's investments will fare. "Your performance depends on the decisions they make" says Mike Alfred, CEO of BrightScope, a California company that rates 401(k) plans...
Who's Running Your 401(k): An Overview
October 2, 2009
Want to rate your 401(k) plan? Try BrightScope.com, which rates employer plans and compares them with peers. One of 31 companies at the Finovate 2009 Conference on online financial services innovations last week, BrightScope has rated 10,000 plans - 348 on Long Island and New York City - and is shooting for 30,000 by year-end. Plans are rated by costs/fees, employer generosity, investment quality and participation rate. If yours isn't rated, you can visit the site's "plan data vault" to find out how to get it scored...
Money Fix: See how your 401(k) stacks up
October 1, 2009
I've reported several stories regarding problems with 401(k) plan administrators siphoning off billions of dollars in fees from workers saving for their retirements. But since many fees are hidden, it's fairly difficult for plan participants to figure out if their 401(k) is a winner or a loser. Enter BrightScope, a research firm that boasts the largest database of 401(k) data and analytics in the U.S., run by brothers Mike and Ryan Alfred. A kind of Morningstar for 401(k) plans, it reviews 4,500 different company plans on a variety of metrics including fees, participation rates and employer matches...
Smart Tools for Shopping, Saving and Investing
September 29, 2009
Wall Street Journal BrightScope today announced tools that allow plan sponsors and advisers to sift through the best and worst 401(k) plans out there. Presently, everyday users can look up their employers? plans for free and see letter grades. The grade is generated by crunching the fine print of the plan from federal filings, as well as comparing it to similar plans...
Finovate: Welcome to the World of Savings
September 29, 2009
Analytics at the BrightScope website show everything about plans including their projected solidity in the market, past performance numbers, cost of management versus actual investment, and more. Basically, BrightScope is full disclosure for 401k investments. To use BrightScope, all you need to do is go to the site, search for your company?s name (a helpful list of suggested corporate monikers appears as you type). The company?s 401k plan is then shown along with common metrics on a chart. You can click on most aspects to get a little more information, but for the most part, everything you really need to know is presented right away...
BrightScope - Ratings for 401K Plans
September 28, 2009
Wall Street Journal Tuesday is Finovate - a personal finance and tech conference here in New York. As we've mentioned before, the event is like March Madness for people who dig online personal finance tools...BrightScope tries to shed light onto 401(k) plans, rating and showing the differences among various plan costs and average performance...
Finovate 2009 Preview
September 17, 2009
USAToday.com Administrative, investment and other fees can make the uphill climb to retirement even steeper. Unfortunately, most employees don't know how much money fees are draining from their savings, and plans don't make it easy to find out. Most large 401(k) plans are able to negotiate lower fees than you would get investing on your own. But some small companies, lacking the clout that big money offers, are forced to rely on high-cost plan providers. BrightScope, a California-based start-up, analyzes fees for about 4,500 plans and shows how they rate compared with the plans of other companies in their peer group. The website is free...
Three savings tips for all ages
September 15, 2009
Hey, Apple employees: Your 401(k) sucks. So say Mike and Ryan Alfred, who have worked with the likes of Lockheed Martin and American Airlines to develop BrightScope, a free site that ranks retirement plans on everything from provider fees to participation rates to match contributions. (Apple scores a troublesome 63 out of 100 points; Microsoft: 79.) "Employers need leverage to demand lower fees from 401(k) providers," explains Mike Alfred, who charges companies to dive into detailed plan data...
Money Changers: Eight Startups Brimming With Hope for the Financial Industry
September 14, 2009
How good is your 401(k) plan? If you're like most workers, you probably don't have a clue. But now there's a free service to help you figure out how your retirement savings plan stacks up. BrightScope (www.brightscope.com), an independent 401(k) ratings and analytics firm, relies on public documents to grade 401(k) plans based on such things as their administrative costs, investment returns and expenses, and company contributions. It uses the information to come up with a single score between 1 (poor) and 100 (excellent)...
Rate Your 401(k) Plan
September 5, 2009
If you want to find out how good is your 401(k) plan, BrightScope can help. It is a website that makes evaluating 401k plans easier. Just enter a name of the company you work for and BrightScope will show you its plan ratings along with the data it used to develop that report...
BrightScope: Evaluating Your 401k Plan Made Easy
September 2, 2009
San Diego based BrightScope, which launched earlier this year, helps people understand their 401k retirement plans and how to maximize the benefits. That's a much needed service: the company says 30% of workers don't participate at all in their company 401k programs. 22% don't contribute enough to maximize matching benefits from companies, and 80% of workers have no idea how much they're paying in 401k administrative and other fees. BrightScope shines a light on all that and helps people take better advantage of these programs...
401k Plans Are Hard To Understand. BrightScope Raises $2 Million To Fix That.
September 2, 2009
Like driver's license copies and health insurance sign-ups, 401k plans are something most employees sign off on their first day and never look back at. Webapp Brightscope aims to give workers fare more information about how their plan is doing. The independent site provides a number ranking for companies it can compile data on, taking fees, employer contribution matching, employee participation, and other factors into account...
Brightscope Rates and Explains Your 401k Plan
September 2, 2009
I've always assumed that I'm unusually clueless when it comes to managing my finances and planning for retirement, but no, everyone else is confused too - at least according to a startup called BrightScope. Naturally, BrightScope says it can help, particularly with analyzing the 401k plans that workers use to save for retirement. The San Diego company just raised $2 million in a second round of funding. For evidence of the widespread befuddlement it's hoping to capitalize on, BrightScope points to data from Hewitt Associates and the AARP showing that 30 percent of workers don't participate in 401k plans offered by their companies, while 80 percent of participants say they don't know how much they're paying in fees. To help employers and employees understand their plans, BrightScope says it has rated 7,000 401k plans and made those ratings available on its website...
BrightScope gets $2M more to help you understand your retirement plan
August 30, 2009
If you've ever wondered how much love your employer gives you by offering a 401(k) or other retirement savings plan, now there's a way to find out... "What the industry needed was a quantitative score, like the Morningstar rating for mutual funds or J.D. Power ratings," Mr. Alfred said. "Participants are relieved to finally have a resource to help them understand whether a plan is good."...
Web site rates 401(k), other savings plans
August 25, 2009
USA Today One company, BrightScope, saw an opportunity to step in and offer 401(k) plan employers and employees plan analysis. The small, California-based start-up rates 4,500 401(k) plans. Its goal is to have 30,000 plans rated by year's end. The site recently started to offer more detailed information to employers for a fee, but the basic information to employees is free...
Fees can drain your 401(k) retirement savings
August 24, 2009
So just how good is your 401(k)? It's hard to know. Answering that question is the catalyst behind BrightScope.com, a company started in January by two brothers, Mike and Ryan Alfred, to uncover the good, the bad and the ugly of employee-retirement plans. The company has developed a database for 401(k) information that allows visitors to its Web site to punch in a company name and see a rating for their plan, along with the data used to develop that report card. Included among the more than 2,000 statistics are net plan assets, the number of participants, fees, the average account balance, service providers and top investment holdings...
The Best and Worst Company 401(k)'s
August 24, 2009
The 401(k) retirement plans of International Paper Co. and Buckeye Technologies Inc. rank among the top performing plans analyzed by BrightScope. The independent online data analysis firm gave Memphis-based IP's plan a rating of 76 out of 100, making it among the top 15% of plans in its peer group, BrightScope said....
IP, Buckeye 401(k) plans rank high
August 17, 2009
Have a hunch that your 401(k) plan is laden with fees? Plug in your company's name at BrightScope.com and the tool will spit out a BrightScope rating that takes into account more than 200 factors such as total plan cost, company generosity and investment menu quality. If you've ever been curious about how your retirement stash compares to your cube-neighbor's, the site also reveals the average account balance at your company. And if you've ever wondered if your competitor has a better retirement plan, BrightScope.com will tell you...
Evaluate your 401(k) plan and your financial adviser
August 14, 2009
Think your 401k plan is free? You're wrong. As a rational person who also happens to receive a 401k statement from time to time, you might reasonably assume that your plan is delivered free of charge. There's no mention of fees anywhere. Bully for you! A free lunch at last. The catch with 401k plans: You are not the consumer. You're not making the buying decision, so you don't need to know the fees...
The Secret Life of 401k Fees
August 5, 2009
An online service called BrightScope rates numerous companies' retirement plans according to overall quality, company generosity, investment menu quality, and more. Here is a smattering of ratings for some of the Dow component companies...If you don't think your employer can make that much of a difference, look more closely at BrightScope's ratings. The site compares each rated company with the top-rated company in its peer group, then shows what impact any relative shortcomings in its retirement plan may have for workers there...
How This Fool Earned $1.5 Million
August 5, 2009
BrightScope Co-Founder and CEO Mike Alfred on how BrightScope helps people find out how their 401(k) rates to make sure they are prepared for retirement (Video Interview)...
Rating Your 401(k)
August 5, 2009
The center of gravity on 401(k) legislation has long been the office of Rep. George Miller (D-CA), who chairs the House Committee on Education and Labor and has taken great interest in issues relating to retirement security in general and defined-contribution plans in particular. Miller is the lead sponsor of H.R. 2989, which combines fee disclosure provisions with a requirement that investment professionals providing advice to retirement plan participants be genuinely independent. All of which sounds good to us. And to our friends at BrightScope, where Ryan Alfred has posted a comprehensive assessment of H.R. 2989's investment advice component. Here's Ryan's conclusion...
BrightScope on 401(k) Legislation
August 3, 2009
Wall Street Journal: Proposed legislation aims to give business owners and their employees a clearer view of retirement-plan expenses... More transparency, advocates say, should help lower the cost of running a 401(k) plan and allow businesses to more easily comparison shop, says Mike Alfred, chief executive of BrightScope, a San Diego provider of 401(k) analysis and benchmarking. "With more information in the marketplace", he says, "what should happen is all fees should come down and that should easily offset and outweigh any incremental cost of a new disclosure process"...
Small 401(k) Plans Often Pay Big Fees
July 31, 2009
Mike Alfred thinks Silicon Valley VCs are mostly clueless, and he plans to prove it with the help of some powerful financiers. Alfred, 28, is co-founder and chief executive of San Diego-based Brightscope, a two-year-old company focused on giving people tools to compare their company's 401(k) plan to that of other similar companies...
The Dawn of a New Morningstar?
July 27, 2009
WalletPop's Lan Nguyen chats with Mike Alfred, co-founder and CEO of BrightScope.com, an Internet-based 401(k) analytics firm, about how to make the right 401K choices. Since its launch in January, the California company has examined and rated 4,000 plans from some of America's largest employers, including Boeing and McDonald's...
Maximizing your 401(k)
Maximizing your 401(k)
July 18, 2009
Wall Street Journal:
To avoid breaking out these administrative fees separately, which might prompt employers to more closely examine plan costs, plan advisers tend to promote the use of funds -- often actively managed -- that have plenty of revenue sharing to cover all these costs, critics say. "Obscurity allows fees to stay higher for longer," says Ryan Alfred, the president of 401(k) data and analytics firm Brightscope...
More Index Funds Sought for 401(k)s
July 14, 2009
Wall Street Journal Blog:
You can't easily change the fundamentals of your retirement plan, but a new Web site aims to give investors some insight into how their company's 401(k) plan compares to others. BrightScope.com uses Department of Labor data that companies must file and other information to rate more than 2,400 company-sponsored retirement plans...
How Does Your Company's 401(k) Plan Rate?
July 14, 2009
Tools for increasing transparency are not limited to health benefits. For example, BrightScope, Inc., rates 401(k) plans on how quickly they can get an employee to retirement. The company has rated 2,400 retirement plans so far and says it will have rated 30,000 plans by year's end...
Employee Benefits: Transparency, Accountability Needed
July 13, 2009
CNBC.com:
While almost every major type of retirement vehicle (including IRAs) comes with some plan administration fee, Mike Alfred, co-founder of the retirement plan rating company BrightScope, says savers rarely know how much they're paying."If a plan is outside a 401(k), you can usually see what fees you're paying," says Alfred. "If you're in a 401(k), it's virtually impossible for the average consumer to get data on what administrative fees they're paying because companies aren't required to disclose that information."...
Five Retirement Fees to Lower or Avoid
July 2, 2009
Way back at the start of this wild year, we celebrated the launch of BrightScope, a leading light in the movement for greater (indeed, the greatest possible) transparency in the retirement plan market. We titled that first item "A Great Leap Forward." Today, we're pleased to note another step in the right direction: BrightScope's consolidation and presentation of data from Form 5500 for a huge number of plans--somewhere, we think, in the neighborhood of 500,000...
More Good Stuff from BrightScope
June 16, 2009
Online 401(k) ratings system company BrightScope is looking to expand the number of plan ratings it has in its system in order to allow plan sponsors across the country to compare their plans against a benchmark....
401(k) Ratings System Aiming For A Larger Footprint
June 6, 2009
Some colleagues recently directed me to a new website that independently analyzes 401k plans from public data sources...The website has gained some prominence among independent fiduciary 401k advisors across the country. How does your company's 401k plan rate?...
BrightScope 401k Ratings
May 21, 2009
BrightScope is one website that approaches the kind of functionality I am searching for. It allows each visitor to provide limited information about his or her company's 401(k) plan in order to develop a variety of ratings. Thanks to other employees who have uploaded plan information, BrightScope was able to evaluate my employer...
Compare Your Company's 401(k) Retirement Plan
May 21, 2009
Yesterday, the ICI posted a comment on Ryan's response at BrightScope's blog and a longer response at its own website. We're pleased to see this discussion continue. It's important. And judging by the progress we've already made, it should help sponsors, participants, service providers, policy-makers, and reporters better understand the 401(k) marketplace...
Our Response to ICI's Response to BrightScope's Response to ICI's 401(k) Survey
May 20, 2009
What has me thinking about this today? It is this excellent post by Ryan Alfred of BrightScope on the range of fees and costs in funds, a fiduciary's obligations to understand all of them, and the lack of transparency as to exactly what plans are actually paying in fees and costs. Moreover, he points out the systemic differences among how different knowledgeable parties - experts may be a fair statement - calculate such fees and costs....
Thoughts on Costs and Fees in 401(k) Plans
May 19, 2009
Question: Is there a listing that would allow me to see how my 401(k) plan compares with other companies' 401(k)s? --Debbie W., Mount Laurel, New Jersey Answer: The first place you should try is the Web site of a new independent rating service called BrightScope..."
A report card for your 401(k) plan
May 14, 2009
Last Friday, we posted an item on the Investment Company Institute's latest efforts to obscure the true costs of qualified retirement plans. We think we touched on a few important points, and that post generated quite a lot of traffic around here for a few days. But the more important contribution to this discussion--more important by far--is Ryan Alfred's latest post at BrightScope's blog. This is required reading, and it's required this very second...
BrightScope Gets It
May 14, 2009
The Investment Company Institute's recent report on plan fees says a median 401(k) "all-in" fee could be about 0.72%. BrightScope's Ryan Alfred says not so fast. The sample was off, and off in a way that would produce lower median fees. It's not just that, but he's also concerned the group might be trying to use the median number as representative of the marketplace despite the fact that they expressly say it shouldn't be used that way in the actual report. Take a listen and let us know what you think.
The EBA Raw Bar with Ryan Alfred of BrightScope
May 5, 2009
The 401(k) plans many U.S. workers will rely on when they retire are getting a good going-over at BrightScope, a new Web site that lets plan participants and sponsors see how their 401(k) measures up against the competition...
Shining a Light on 401(k)s
April 24, 2009
It's been a precipitous fall. The balance in the majority of 401(k)s keep going lower and lower and lower. Now,to add insult to injury, investors are learning that it's not just the stock market that is hurting their bottom line, it's the fees being charged by their 401(k) provider...
Those Pesky 401(k) Fees. You Could Be Paying Excessive and Unreasonable Fees.
April 17, 2009
I had dinner recently with the brothers Alfred, Mike and Ryan, two of the co-founders of BrightScope, and much of the conversation centered around the question of transitioning the management and analysis of 401(k) plans from a practice oriented perspective to a plan participant oriented one...
Looking at Fiduciary Performance from the Vantage Point of a Plan Participant
March 30, 2009
"As we've written in the past, the faltering stock market, combined with employers eliminating their 401(k) matching contributions, has made retirement security quite a gamble. But if you are one of the brave, a new tool can help you find out how your 401(k) measures up to 401(k) plans at other companies..."
How does your 401(k) measure up (or fall short)?
March 30, 2009
"Many companies are suspending their 401(k) match in an effort to improve their bottom line. But some employers still offer a generous contribution to retirement accounts. U.S. News asked BrightScope..."
The 30 Companies With the Best 401(k) Matches
March 29, 2009
"With the retirement hopes of tens of millions of Americans riding on 401k plans, it is noteworthy that very little has been done to allow 401k participants to compare and rate these plans... A new web service called BrightScope aims to change that. Using a complex methodology that 'is 100% quantitative' and 'truly independent', the BrightScope service gives a company's 401k a numeric score between 0 and 100 and plots the company's score along a colorful chart that also shows lowest, highest and average ratings of 401k plans in that peer group..."
Tools for Rating Your 401k
"Even though most people I know are too scared to even look at their 401(k) statements right now, have you ever thought about how well your company's plan stacks up to other similar companies?..."
Brightscope: How Does Your Company's 401k Plan Compare?
March 17, 2009
"We asked BrightScope - a new online database that has analyzed more than 1000 plans, based on information from companies and filings from the U.S. Labor Department and Securities and Exchange Commission - to sift through plans with at least $100 million in assets."
How Does Your 401(k) Stack Up? The Best 401(k) Plans The Worst 401(k) Plans
March 9, 2009
"A new ranking system has emerged in the defined contribution universe, allowing plan participants, plan executives and others to compare performance of different funds and see just how their company's retirement plan stacks up."
New ranking pits DC plan vs. DC plan
March 1, 2009
"Move over health care, the brothers Alfred aim to equip retirement plan participants with just the kind of tools and information that the CDH movement has been hungering for for years. What a difference a historic economic crisis can make."
Front and Center
February 25, 2009
"When it comes to 401(k)'s, a new La Jolla company considers itself the industry watchdog, arming clients with the analytical tools they need to make educated decisions about their retirement plans."
La Jolla company will rate your 401(k) plan
February 24, 2009
Still parceling out items of interest that have stacked up on my desk in the last week or so. Among the things I still haven't gotten to, I have to admit, is a careful reading of the Seventh Circuit's recent decision in Heckler v John Deere, but I will, shortly. In the meantime, though, the bright guys over at BrightScope have, and their's is a very interesting take. You can find it right here. Its clear, when you read the post, that they don't just have the analytics down when it comes to 401(k) plans, but also their structure and the manner in which they operate.
Shining a BrightScope on Heckler v. John Deere
February 13, 2009
"Consumers in the market to buy cars, computers or practically anything can turn to a plethora of resources to find the best deal. But when it comes to 401(k) plans there's a noticeable gap... That is until last month's launch of BrightScope..."
Bright(Scope) Idea: Firm Launches Site to Compare 401(k)s
February 13, 2009
Have you ever wondered how your 401(k) stacks up against other company retirement plans? "Now you have a chance to find out. A new independent rating service called Brightscope is starting to analyze and compare 401(k) plans nationwide."
Find out how your 401(k) stacks up
February 11, 2009
"I love this story. A couple of weeks ago I blogged about BrightScope's launch, and pointed out my view that more information generally means less litigation. I learned thereafter that some think that is a counter-intuitive thought; presumably, people who believe that think that if you cover up problems and don't let people know what's going on, they may not find out and thus may not sue you..."
Do People Who Are Told the Truth Sue?
February 10, 2009
"Both Congress and the U.S. Department of Labor--the federal agency charged with overseeing the fiduciary aspects of retirement plans--have given 401(k) fee disclosure plenty of attention. Still, while proposed regulations and legislation work their way through the system, it's a small, privately-held business that puts fee transparency and other 401(k) features into a practical setting. The company is BrightScope, Inc., an independent data analytics firm that just launched a 401(k) ratings disclosure Website featuring the BrightScope Rating, the nation?s first online 401(k) rating system--it judges various plans and spits out a hard number for you to look at...
How Does Your 401(k) Rate?
February 3, 2009
"Until now, an objective evaluation of 401(k) plans has been extremely difficult because of the complexity of these plans and the cleverly hidden costs which would take a pension actuary to uncover. By some accounts, the combination of poor investment options, high expenses and poor planning have caused many plan participants to have a zero return on their 401(k) investments. A recently launched web site, Brightscope, may change everything."
Shining a Bright Light on a Dark 401(k) Secret
February 1, 2009
"Employees can use Brightscope to find out how good - or bad - their 401(k) plan really is... Employers can pay Brightscope to obtain a full set of analytics used by Brightscope to rate its plan. It should be a win/win, for employees and employers. It's long overdue. Brightscope is a very bright idea."
Check out your 401(k) in ten seconds
Holy Transparency, Batman! If you like Zillow, and you have a 401(k) plan, have I got a website for you. BrightScope has now publicly launched its rating website, in which you plug in a particular company's name and the site then provides you with a colorful, graphic presentation of that particular plan's performance and structure in comparison to certain benchmarks and comparable companies. Its simply a lot of fun, and, moreover, allows an easy, quick overview of a particular plan, without having to wade through all of the paper information for a particular plan.
BrightScope and 401(k)s
January 30, 2009
Sunday February 1, 2009 - One Word That Could Change 401k Plans Forever - BrightScope - If you are a plan sponsor or a participant of a 401k plan (and most workers are these days), you may have wondered why it was so hard to figure out if your company has a good plan or not. Well all that is about to change! Joining me on the program this weekend is Mike Alfred, Co-Founder and Co-CEO of La Jolla based BrightScope, which has launched a website that provides a clear, straight-forward objective rating system on 401k plans across the country (public launch, January 29).
One Word That Could Change 401k Plans Forever - BrightScope -
January 29, 2009
USNews & World Report: Money & Business - Planning to Retire: Have you ever wondered how your 401(k)'s company match, fees, and investment choices compare to those offered by other employers? Now there's a place where you can dish all the juicy financial details online. BrightScope Inc., an independent data analysis firm, launched the nation's first online 401k rating system today.
Rate Your 401(k)
January 29, 2009
In the 401(k) industry, transparency means fee disclosure. And, of course, it's what Congress and the Department of Labor have been focusing on over the last few years. But it may be the private sector that puts transparency into a very practical setting. BrightScope, Inc., an independent data analytics firm today announced the launch of their 401k ratings disclosure website featuring the BrightScope Rating, the nation's first online 401(k) rating system.
First online 401(k) rating system launched by BrightScope, Inc.
January 29, 2009
BrightScope has created a pretty cool online 401(k) rating system called the 'BrightScope Rating Engine' that has been in beta for some time. BrightScope allowed me to review and test the system during the beta period and I've been impressed by what I've seen so far.
Announcing the BrightScope Rating Engine
January 29, 2009
Back on the 14th, we posted an item about BrightScope, a remarkable new tool that will help 401(k) sponsors and participants understand the strengths and weaknesses of their plans in ways that simply weren't possible until...today. We're pleased to announce that BrightScope.com is now up and running. We encourage you to take a look.
Happy Birthday, BrightScope
January 13, 2009
What would a 401(k) plan look like if you could create the fantasy football version (fantasy 401(k)?) for your company? Well, thanks to the good folks at Brightscope...you don't have to wonder anymore.
The Perfect 401(k) Plan?
