“ETFs don’t have the same advantages when you put them in retirement plans … so it will take time,” said Morningstar fund analyst Michael Rawson in the article. “People like ETFs because there is low cost. But typically, 401(k) plans have very low share costs.”
ETFs also face challenges in the retirement market because record-keeping is geared to mutual funds. [ETFs Gaining Popularity in 401(k) Plans]
“There’s a long road ahead for ETFs in 401(k) plans,” Alec Papazian, associate director at Cerulli Associates, said in a recent Pensions & Investments article, adding “there are a lot of administrative complications” that represent “significant hurdles” for ETFs in 401(k) plans. [401(k) Retirement Plans Shy Away from ETFs]
Headline and story updated throughout.