Press Release
McHenry Consulting Releases 401k Revenue Sharing Report In-Depth Analysis of the Retirement Industry's 'Big Secret'
BERKELEY, CA, September 10, 2001 -- McHenry Consulting Group, a leading provider of strategic services to the financial services industry, has released its report on the practice of asset-based revenue sharing between mutual funds and retirement plan service providers.
Revenue sharing is the "big secret" of the retirement industry. Never before has there been an objective and explicit analysis of the practice of vendor cross-subsidies. The McHenry Revenue Sharing Report - 'Whose Money is It?' provides employers, plan sponsors, employee/participants and all other observers with the first such resource.
The free, twenty page executive summary is available from McHenry via Web download from www.PlanTools.com. This information will help mutual funds, service providers, TPAs, investment advisors, registered reps and consultants to survive and thrive in the new market reality.
Anyone involved in the 401k industry must be fully equipped when this subject comes up.
Key Points from the Report:
- Revenue sharing is a poorly disclosed and relatively unregulated practice, which falls into the gap between Department of Labor and SEC oversight.
- Over $500 billion of US 401k assets may be invested through mutual funds that share revenues with other service providers.
- As many as 20 million American workers and their 401k accounts may be affected by this method of cost recovery and service pricing.
- Between $1 billion and $1.5 billion of investor assets may be redirected each year through this practice.
- Hidden costs, unfair pricing and loss of control for employers and their workers are all possible effects of this business practice.
- High balance plan participants may be subsidizing lower balance participants without full disclosure.
- There are things that employers and plan sponsors can do to protect employees and plan assets.
An in-depth, fifty page companion product designed for industry professionals is available as well. That publication, "Revenue Sharing - The Inside Edition" is part of a support package that is priced at $950, including four quarterly updates on the subject.
About McHenry Consulting Group
Founded by Harris in 1998, McHenry helps service providers to create, market and deliver superior products and services in the areas of investment-based benefits (profit sharing, 401k, defined benefit, executive compensation, stock option programs) and the needs of high net worth individuals and institutional investors.
McHenry's professional staff includes veterans of the financial services, technology and human resources fields. In addition to the firm's headquarters in Berkeley, it also has offices in Boston, MA; Portland, OR and Cambridge, England.
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