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EdLaFave

Arguing Expensive Sales Reps Increase Participation And Therefore Help

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I'm starting to see a recurring argument where it is claimed that expensive sales reps increase participation rates in 403b and 457b plans. The argument goes on to claim that people participating in their 403b/457b who otherwise wouldn't have been are in better shape even when you account for the high fees.

 

I have my own passionate response to this but I'd like to read others' thoughts. If anybody has links to any data that would support or refute this claim then I'd like to read up on it:

  • Under what conditions are they claiming increased participation and to what degree?
  • Has a sales rep laden system ever been compared against a school with a single low cost vendor offering target date funds who uses a Retirement Services department that actually reaches out to employees?
  • If people aren't participating in their 403b/457b how do we know they're "blowing" the money? How do we know they aren't investing in real estate or a taxable, hsa, ira, 529, etc. plan?
  • How is this claim accounting for the obvious harm being done to people who would have participated even if there were 0 sales reps?

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