Do I Need an Adviser for a Solo 401k & Fee Based vs Fee-Only Advisers

While the solo 401k rules do not require the solo 401k trustee to hire an investment adviser and can thus decide how to invest the solo 401k funds, those who do choose to hire an adviser should understand the difference between a fee based and a fee-only adviser.

What is a Fee Based Adviser?

  • The adviser receives multiple types of fees.  For example, the adviser receive a percentage of asset under management (AUM) or a flat fee in addition to 12b-1 fees. 
  • A 12b-1 fee is a sales commission that is paid by an investment company on an annual basis. 

What is a Fee-Only Adviser?

  • The advisers only receives one type of fee that is paid either by the solo 401k plan, the self-employed business or the solo 401k participant.
  • The fee is easily understood and disclosed, and the adviser charges either a percentage of assets under management (AUM) or a flat fee.
  • Commonly charged as a percentage-of-assets fee.

About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>

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