This record of growth serves as further proof that ETFs are in fact viable options in 401(k) plans.
“For many investors, ETFs are still new,” said Schweiss. “A lot of our clients that are using ETFs in 401(k)s are professional services firms, such as law offices and dental offices, and some self-directed accounts.
In terms of where TD Ameritrade is seeing advisors allocate the most of their 401(k) ETF assets, it has been into “the most efficient asset classes, like U.S. large-caps,” said Schweiss. TD Ameritrade offers access to more than 1,000 ETFs – that’s every ETF available in the marketplace, excluding leveraged ETFs — in its 401(k) plans. There are “some 401(k) plans with positions in several hundred ETFs,” according to Schweiss.
TD Ameritrade does not dictate which funds are offered to different companies or investors. There is no one, set menu.
“We see our role as accommodating access to markets for participants, plan sponsors and their financial advisors, so we don’t pretend to know what’s best for any individual in terms of mutual funds or ETFs. We let our clients decide,” Schweiss said.
He noted TD Ameritrade’s retirement plan assets are most heavily concentrated in ETFs offered by BlackRock’s iShares, State Street Global Advisors and Vanguard – the three largest U.S. ETF issuers – and to a lesser extent to WisdomTree.