401(k) Fees On A Downward Trend Giving ETFs A Better Place In the Industry
July 28th at 10:00am by Tom Lydon
It appears 401(k) plan sponsors are listening, as the fees associated with them are trending on a downward momentum, leaving more opportunity for exchange traded funds (ETFs) to find their niche in this market.
A recent study of 436 plan sponsors polled by Deloitte reports that the average fund expense fee is 0.63%, down from a previous average of .075%.
Mariana Lehman for Ignites reports that an additional 18% of funds used by plan sponsors in the survey have average fees of 0.50% or lower. Some of the change has also come from 401(k) plan sponsors’ diligence in looking beyond mutual funds for options that will cost their participants less.
It seems the upcoming legislation changes are not the only reasons that 401(k) fees are lowering; upset employees suing employers is a huge reason for sponsors to keep their better interest in the plan participants.
This is wonderful news for the industry because it is evidence that plan sponsors are listening, or at the very least, cleaning up their acts ahead of legislation.
