ETFs Are Scarce in 401(k) Plans, However …

ETFS in 401(k)s may be ready for a surge.

It’s no secret, ETF adoption in 401(k)s is pretty dismal. Reasons vary, but most critics agree intraday trading is of little or no value for retirement plan participants, and low-cost investment options can be satisfied elsewhere. However, all that may soon change, driven by (what else?) robo advisors.

A recent survey from Cerulli Associates survey shows more ETF sponsors are focusing distribution efforts on small- and mid-sized defined contribution (DC) plans (those with assets less than $250 million). And as the online advice delivery market is flourishing, there has been a revived effort to bring ETFs to 401(k) plans.

“The defined space may become an area of focus for these firms, especially in areas such as micro plans,” Boston-based Cerulli writes.

Also, according to firm:

Exit mobile version