Shawmut Consulting Associates, Quincy, Mass., was designed to be a 1940s business trapped in a modern world. Each of the consulting firm's five offices have windows that open, and employees have fully paid health benefits. There are no cubicles and no voice mail.
"As long as I have breath, there will not be cubicles," said Les Revzon, Shawmut president and chief executive officer. "We wanted the company to be like something out of the 1940s and 1950s, with personal service."
Actually, some of Shawmut's office buildings would have been dated even in the era of Sam Spade. The building housing the Portland, Ore., office, for instance, had been a jail in the 1800s, said Mr. Revzon.
But while Shawmut's co-founders, Mr. Revzon and John Aucin, may have one foot settled in 1940, they have another firmly planted in the present day. When they started the company in January 1998, they created a 401(k) plan for their nine employees, Mr. Revzon said. And like many executives at small to midsize businesses, he said he had to do a bit of sleuthing through the paperwork to decode the real fees because the actual costs were buried in about four pages of fine print.
"I was astounded at what they (service providers) were charging," Mr. Revzon said. "In some cases we were being charged 100 basis points, in the wrap fees and expenses, over the prevailing average rates."
In the end, Mr. Revzon figured the plan would cost about $10,000 total in fees -- which isn't unusual. One Shawmut client had said he was only paying $8.50 per plan participant in fees, but Mr. Revzon's crew delved deep into the contract to detect a $65 per person minimum.
"Between trustee services, record keeping and management fees, he was paying an additional $9,600 and he had no clue he was doing that," Mr. Revzon said.
So, Shawmut developed a service to explain to "mom-and-pop shops" what they are paying for in their 401(k) plans, to help them lower these fees and to ferret out whether the plan is properly diversified or has fallen victim to style drift, Mr. Revzon said.
"All we want to do is honestly explain what they are paying," he said. "We thought it would be a neat concept."
