On January 19, BrightScope launched a new online tool, the Personal 401(k) Fee Report, which is available free on the company website. The new tool provides individual investors and financial advisors with personalized data about retirement plans, comparing current fees to other options.
BrightScope is a 401(k) plan rating company that collects data on plans to help sponsors, advisors, and participants improve their 401(k) plans. By compiling 401(k) data into detailed presentations, the company makes complex retirement plans easier to understand
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BrightScope has data on about 30,000 individual 401(k) plans, so in many cases generating the Personal 401(k) Fee Report is as simple as entering the name of your company and answering a few questions about your contributions to the plan.
In an interesting addition to BrightScope's standard 401(k) ratings, the report compares the cost and retirement results of the selected 401(k) plan against a typical low-cost IRA and indicates if switching would be beneficial. This provides a valuable tool for financial advisors seeking to generate business by showing clients how much they could save rolling their 401(k) into an individual retirement account (see screenshot #1, below). The report also offers more detailed information, including a breakdown of the fees and a list of the funds associated with the 401(k) plan (see screenshot #2, below).
BrightScope makes its money providing tools that help 401(k) plan sponsors monitor plan performance and insure that the plan they have is right for their employees. The company also markets tools to financial advisors. The Personal 401(k) Report serves as a new way to draw individual investors and financial advisors to the BrightScope site. According to website usage estimates from Compete.com, BrightScope ended December with 27,000 unique visitors, down from 35,000 in September.
Compete.com Jan.2010, traffic data here
BrightScope could also potentially generate additional revenue by allowing users to link directly to accredited advisors from the report, charging the advisors a finder's fee for each lead.
How It Works
BrightScope collects data on 401(k) plans and ranks them in peer groups, making it easy to quickly compare and evaluate plans. The company considers a number of factors, such as fees, quality of investments, and corporate matching programs, in order to assign a rank to each 401(k). The quantitative ranking system measures how quickly a plan gets its users to a successful retirement. The new report adds another tool to individual workers who need to know if they are contributing enough into their retirement plans and whether they are taking full advantage of matching benefits programs offered by their employers.
#1. The Report Indicates Potential Savings
#2. Detailed Information on 401(k) Plans
