Have you ever looked at your retirement account statement and wondered why it hasn’t increased more over the years or why you have seen a recent decrease?  Or why you have to pay so much in health insurance premiums, who is getting paid behind the scenes, how much you have paid in fees over your lifetime, and if these payments are fair?  Let’s take a deeper dive.   

In a free and competitive market, professionals earn based on time and value, and any extra services are factored into the costs. This logic is clear in the health insurance sector, where brokers earn commissions that are typically proportional to the services they render. While some employers might not be aware that they can negotiate these commissions depending on the plan size, brokers remain cautious. After all, excessive commissions would directly raise premium costs, making employers and employees acutely cost-conscious. 

But when it comes to 401(k) advisory services, the narrative changes. These services often bypass the direct scrutiny of costs by employers. Unlike the upfront costs in health insurance, 401(k) advisory fees are more concealed, often quoted as percentages rather than fixed fees and sometimes buried within the cost of the investments. This lack of transparency and direct billing means employers might not feel the pinch, making them less likely to question the costs or the value they get in return.


Much Shelist Law Firm:

•              401(k) advisory fees (2021): $124,882 (for 168 participants)

•              Health insurance broker commissions and fees (2021): $87,848 + $5,802 (for 248 participants)

Welch Brothers:

•              401(k) advisory fees (2021): $106,575 (for 201 participants)

•              Health insurance broker commissions and fees (2021): $59,078 (for 186 participants)


Health insurance brokers, due to the very nature of their services, often have to invest more time and effort compared to 401(k) advisors. One would assume that this increased effort would justify higher compensation. Yet, as the examples illustrate, this isn’t always the case. It’s crucial for employers and employees alike to question these disparities as well as service provider time compensation, obtain accurate and comprehensive benchmarking data, and ensure service providers are offering true value for the money.