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Our updated fund menu reduces fees by nearly 50%
Employers Company news

Our updated fund menu reduces fees by nearly 50%

Jeff Rosenberger, PhD

Six years ago we outlined our investment philosophy, and we’ve maintained the same principles as a north star as we’ve grown. We keep our fees low, diversify investments, and ensure those investments are appropriate for a saver's age and long-term goals.

No matter where you are in your retirement journey, fees associated with your investments can impact your overall savings in a big way. Keeping fees low helps you save even more money for your future. Today we're excited to share that we've updated our fund menu, lowering fund fees by nearly 50%.

If you have a Guideline 401(k), here's what this means for you:

Why is our fund menu changing?

We’re making these updates to help lower expense ratios, which are the fees associated with managing your investments. By doing so, we aim to promote long-term growth through compounded returns by making investing more affordable.

As an ERISA 3(38) fiduciary for our 401(k) plans and a Registered Investment Advisor, it is our responsibility to act in our savers' best interests, including working to reduce investment fees when possible.

What's changing?

We're updating our fund menu, replacing 17 higher-expense ratio funds with 15 lower-cost funds of similar performance. In total, the changes will reduce expense ratios by nearly 50%. The new expense ratios will cost 0.04-0.16%, which is $4-$16 annually for every $10,000 invested.

This update will also lower expense ratios for our six managed portfolios, with blended expense ratios of 0.064-0.067%, $6.40-$6.70 annually for every $10,000 invested. For perspective, our managed portfolios had a blended expense ratio of 0.10% when we were starting up in 2016. That means we've been able to reduce that fee by 1/3 since then.

Our two lowest-risk managed portfolios will have minor changes as we switch out our treasury inflation-protected securities fund to a lower-cost fund better aligned with industry standards. As such, these changes will mainly impact savers who have built a custom portfolio.

With these changes, we will also feature a fund menu entirely of Vanguard index funds. We've chosen Vanguard because it is a market leader in low-cost indexed mutual funds, serving over 30 million investors.

When are these changes happening?

We'll migrate to the new funds between July 31 and August 11, 2023. If you have a Guideline account, you don't need to do anything for the updates to take effect.

What about ESG funds?

We're frequently asked about adding more environmental, social, and governance (ESG) funds to our menu. Unfortunately, the fund industry continues to charge hefty premiums for ESG funds. Currently, these high costs don't align with our mission to keep fees low. We will continue to offer VFTAX for those looking to invest in ESG funds.

What about an "open architecture" fund menu?

In case you’re not familiar, an open architecture fund menu is like a buffet of investment options. It allows investors to choose from many different funds managed by various companies. While this structure can help savers diversify their investments, opening up broader access to mutual funds can also significantly increase fees.

Many mutual fund companies pay expensive fees to intermediaries, such as recordkeepers and brokers. As an investment fiduciary, we do not solicit or accept kickbacks from any fund companies. When you see platforms promoting an "open architecture" approach, be careful that you may be paying more in fees so a third party can be paid for selling you the funds.

Open architecture fund menus are more than just expensive — they can also be complicated. Sifting through a list of funds and trying to make the "right" decision can feel overwhelming for many people. That's why at Guideline, our investment philosophy is rooted in simplifying our offerings to ensure we keep fees low and help you reach your goals securely.

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The information provided in this article is general in nature and is for informational purposes only. It should not be used as a substitute for specific tax, legal and/or financial advice that considers all relevant facts and circumstances. You are advised to consult a qualified financial adviser or tax professional before relying on the information provided herein.

See our full fee disclosure at

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