Some advisors argue whether the recent DOL fee disclosure regs were either the latest version of Y2K, or the biggest waste of paper known to mankind. While no one is arguing against fee transparency, the formats do leave a lot to be desired. Yet a recent study by AARP indicates that 75% of plan participants prefer paper disclosures, 70% are more likely to read paper versions and 73% are more likely to save it.
But let’s dive deeper – younger people prefer electronic to paper. Judy Miller of ASPPA laments that we did not ask if people would pay more for paper and although almost half of the people read the disclosures electronically, no similar question was asked of those getting paper versions. Costs related to creating paper versions represent funds that providers could have used for other services, especially in an era of deflationary price pressure.
Like Y2K, fee disclosure was met with a yawn by plan sponsors and participants, even while providers beefed up their call centers. But the lack of response also could have been due to the fact that most provider disclosures were difficult if not impossible to understand, whether in print or electronic form. Sounds like an opportunity for experienced plan advisors.
