Investment-related fees can, for purposes of discovery and analysis, be seen as two types: Those "external" to the fund and those "internal." The former, external fees, directly affect participants by reducing the reported return of a plan's investment options. In order to uncover external fees, begin by combing through the sections of the proposal and other materials you've gotten from providers for disclosures or mention of wrap or contract charges, any asset-based fees, loads (which should not exist in any form, front, back or otherwise). As with most of the fees we've looked at already, these are, generally, explicitly disclosed although the terminology can confuse.

Investment advice services, managed account programs, asset allocation programs frequently carry additional charges above the internal fund expenses. These may not be as clearly presented. If you don't find them stated, ask. You may be told, "There are none." Okay, but carry that question over as you turn to internal fees. You may find something there.

To begin looking at internal fees, pull out those lists of "consideration funds" you've gotten. Ideally, you'll have somewhere between 8 and 12 funds listed by investment category plus, most likely, a menu of "lifestyle" or "target maturity" funds. The former usually have descriptive words like "conservative," "moderate," "growth" in the title; the latter, dates, or years like 2010, 2015, 2020 and so forth. Since the fund categories should be pretty consistent across platforms, you can easily create a comparison sheet that places each provider's offering together on one table or page. Once done, you'll be able, at a glance, to see the range of fees, expenses, credits that apply to each platform. Equally important, you'll be able to look for similar, nearly identical or identical fund names and to compare the expense information for those funds.

As you look at "like-named" funds, you will, in all likelihood, see some variation. Higher fees may indicate the provider is using a higher priced (and therefore higher compensation paying) fund or is "re-registering" shares. In either case, your participants' returns will, by definition, be impacted due to this higher internal expense. Should you, on this basis alone, eliminate the provider? No, there are many variables in this exercise. However, you will want to give some weight to this when, with all the information assayed, you look to assess total value.

Having used the "consideration funds" to begin to create your comparison, and to give your analysis structure, turn now to those providers that only provided their entire list of funds. Going category by category, look at their offerings and choose, using criteria that make sense to you or are drawn from your investment policy, funds to put into your comparison. Keep in mind, you are NOT selecting your fund line-up; you are trying to follow a reasonable process for assessing the true cost and value of a range of fund platforms. Once you've selected funds for each provider, you have a framework to begin calculating the "all in" cost of each provider's platform and for narrowing the field if, as sometimes happens, your survey turns to a search.

Next: "Consideration Funds."