Putnam Investments said Wednesday that it will soon offer to participants detailed fee disclosures online, including information about transaction fees, total fund expense ratios and fees for services such as managed accounts and online advice.
“Beyond what's available in a prospectus or what's available in statements, the industry hasn't done much for fee transparency,” Edmund F. Murphy III, managing director and head of defined contribution, said in an interview.
The online fee disclosure will become available Oct. 22, and it follows Putnam's rollout in June of an online disclosure of fees to sponsors, including information on costs of record keeping, investment management and advisory fees.
“We devised this approach in 2009, and we're sticking to our schedule,” Mr. Murphy said, explaining Putnam's strategy of providing online information first to sponsors and then to participants. “Education (about fees) is critical. Many participants aren't aware of the fiduciary responsibilities of plan sponsors.”
Putnam's disclosure “will address all major types of costs related to Putnam-administered retirement plans, including the expense ratio associated with each investment option in the plan, converted into an actual dollar value per $1,000 invested,” according to a Putnam news release.
The company will identify to participants all services available through their respective plans, including automatic enrollment and escalation features, education programs, investment choices and the company's lifetime income analysis tool, the news release said.
Putnam's fee disclosure to participants is getting a jump on the Department of Labor, which is preparing a set of rules governing disclosure between sponsors and participants and which is expected to issue its proposal soon. Mr. Murphy said Putnam will make alterations if its fee disclosure doesn't match DOL requirements.
“We believe that fee transparency is both the right of every plan participant and the obligation of every plan provider,” Robert L. Reynolds, Putnam's president and CEO, said in the release.
Mr. Murphy said his company hasn't made a scientific assessment of how its fee disclosure to sponsors has fared, but he noted that Putnam will initiate an online survey for sponsors in early November and take two months to gather data. Putnam expects to publish its results in January, Mr. Murphy said, adding that the company eventually will launch an online survey of participants' reactions to fee disclosure.