ETFs have been slow in gaining traction among 401(k) plans because their cost saving aspects is relatively nullified in the plans, and ETF providers have not employed a strong sales and marketing division.
“If you look at the number of sales people pushing actively managed funds or passively managed versus the number of wholesalers pushing ETFs, that is a factor,” Fred Barstein, founder and executive of The Retirement Advisor University, said. “[ETFs] can be incredibly valuable; there should be a greater place for them, but the market reality overcomes logic.”
For more information on ETFs in 401(k)s, visit our 401(k) category.
Max Chen contributed to this article.