At the supermarket, shoppers receive detailed receipts of their scanned and bagged items. After restaurant meals, waitstaff hand diners itemized bills. But call out “Check, please!” to a financial services provider and the result might be a rundown of cryptic line items — 12b-1? Expense ratio? — or a passing reference to Part 2 of Form ADV.

Thanks to a new fee-disclosure rule from the Department of Labor, financial pros who offer retirement advice will have to disclose all costs associated with their services and products beginning in April.

But a disclosure that meets the letter of the law might not tell you how much you’re paying in dollars and cents. To find out, you need to know what those fees are called, where they’re referenced, and how they’re calculated.

What’s missing from your statement

“Amount due for fees” isn’t a line item most investors will find in their statements. Instead, fees are typically expressed as a percentage of the assets in an account and then skimmed off the top of annual returns or baked into an investment’s share price.

The lack of clarity might explain why 46 percent of full-time employed baby boomers polled by investment advisory firm Rebalance IRA in 2014 said they believed they paid no fees in their retirement accounts.

Fees charged by mutual funds within 401(k) plans are on the decline, but all-in costs — including plan administrative fees — often depend on factors including plan size, total assets, service levels and fee structure that are largely outside of an individual consumer’s control.

Start digging for fees here

If you know what you’re looking for, it’s a lot easier to find the fees buried in 401(k) plan summaries, obscured by jargon in mutual fund prospectuses, and banished to the dark corners of money management firms’ FAQs. Here’s where to point your headlamp:

Brokerage costs: The broker with the lowest commissions might not be the best deal. Investors who trade infrequently should look out for annual inactivity fees and maintenance costs (which can range from $50 to $200 combined). There are also transfer or liquidation fees ($50 to $75 for a full or partial transfer) and fees to access data feeds and trading tools.

401(k) administrative fees: Your employer might offer to match a portion of retirement plan contributions, but who covers the tab for administrative housekeeping? This fee can be around 1 percent to 2 percent annually (charged as a percentage of assets) to cover the costs of record keeping, compliance, statement mailings and investment curation. If passed along to the employee, it’s deducted directly from an individual’s account and, as an SEC investor bulletin reveals, has a major impact on portfolio returns over time.

See the plan’s “summary plan description” or e-mail HR to find out if you or your company pays the administrative fees. If the fee is on the high side, consider investing in the 401(k) only until you have maxed out the company match and directing additional retirement savings dollars to a self-managed IRA.

Mutual fund management fees: Want a new way to say “fee”? Crack open a mutual fund prospectus where sales commissions, management and administrative costs are referred to by names such as “loads” and “12b-1 fees.” The double blow of the “expense ratio” is the most costly of all: First, as the account balance increases, so does the amount skimmed off the top to cover fees. And every dollar paid in fees is one less dollar left to compound and grow.

At the high end of the fee spectrum are actively managed mutual funds helmed by investment managers, which carry an average expense ratio of 1.31 percent, according to trade association Investment Company Institute. Index mutual funds, which have an average expense ratio of 0.71 percent, are a lower fee alternative.

These averages provide a good baseline, but it’s even better to compare expenses and returns with those of its peers via sites such as and

Personal money management/advisory fees: The cost of hiring a fee-only financial planner sounds straightforward. But is that fee charged per hour, by task, as a percentage of assets managed or a combination of these methods? The National Association of Personal Financial Advisors offers a script of tough questions to ask a financial adviser.


Dayana Yochim is a staff writer at NerdWallet, a personal finance website.