Overview of Fees
Part of the problem with understanding fees is that there are multiple fees that go to various entities, all of which play a crucial role in your retirement plan. In the case of Icon, we’ve eliminated unnecessary costs and expenses wherever possible.
Let’s start with quickly reviewing the types of fees commonly found in a retirement plan.
Fund Management Fees
These fees can often be the most expensive cost of an account. This is the fee paid to the company that manages the investment funds. This can typically end up being an area where investors get charged large amounts in fees without ever knowing it. High-cost investments and “Dominated Funds” are easily missed by most investors and can lead to large amounts of missed earnings caused by high fees.
Icon’s average fund management fee is 0.08%, while the industry average is 0.79%*. Icon is almost 10 times less expensive.
Plan Administration and Custodial Fees
These fees cover the cost of managing and maintaining your account and include expenses such as recordkeeping, website services, account statements, customer support, etc. All retirement accounts are required to have a custodian that securely holds your savings.
Advisory Fees
This is the cost of receiving advice on how to invest. Advisors can be real people you work with who typically charge you a percentage of your total assets annually. Using a robo-advisor instead of a person can be about half the cost.
Icon does not charge advisory fees.
Icon’s Fees: A Fairer Approach
Most retirement plan providers charge a fee that is based on your total assets. This means that as you make more money, so does your plan provider. This is how fees start to eat away at your savings.
We’ve done something completely different. Icon’s fees are based on a low, flat monthly fee of $4.00.
The comparison chart below shows what you’ll pay in annual fees based on how much money you have in your account. The amounts below don’t include fund management expenses. (We’ll get to that in a minute.)
| $50,000 | $250,000 | $500,000 | |
Icon$4.00 flat monthly
|
$48 | $48 | $48 |
401(k)1.13% (Small employer average*) |
$565 | $2,825 | $5,650 |
Now let’s compare fees once you add in fund management expenses. This is commonly referred to as an “all-in” cost.
The chart below shows what you can expect to pay annually on a savings balance of $100,000.
| Average Fund Expense | Plan Administration Fees | Annual Fees on $100,000 | |
Icon |
0.08% | $4.00 per month | $128 |
Typical Robo-Advisor |
0.12% | 0.40% | $520 |
Manually managed portfolios(Traditional advisors**) |
1.13% | 0.99% | $2,120 |
State-run IRA |
0.13% | 0.87% | $1,000 |
401(k)(Small employer) |
0.79% | 1.41% | $2,200 |
