Charles Schwab (SCHW) has been busy coming up with a platform to add ETFs into an all-ETF 401(k) plan by early 2012. How is the progress as of now?
Schwab isn’t the first-mover in this growing space, but when the plan launches, it will be the biggest player by a long shot.The move is huge for the ETF industry, which has been trying (and slowly succeeding) in cracking this market.
Record-keeping is the only thing holding back ETFs from truly breaking into the 401(k) market, but several 401(k) plan providers are working around this obstacle and proving its a minor glitch, at the most.
Carolyn Hill and Oliver Ludwig for Index Universe reports Schwab already runs about $200 billion in retirement assets. Lower costs and returns from an ETF asset pool may be just what investors need to start feeling inspired to put more money into retirement accounts again.
Schwab hasn’t yet decided how much they might charge for advice, but a top public relations officer said it could be in the range of 0.40 to 0.50 % of assets under management per year. That compares with industry standards of at least 0.65 %.
Tisha Guerrero contributed to this article.