Hear that? There's a revolution taking place in the exchange traded
) industry, and dominance of the $2.7 trillion 401(k) market is at
stake. ETFs have long sought to be staples in 401(k) plans,
and the industry is ready to take on the final front in the battle
for assets. Who's on the front lines?
is going after retirement plans with $50 million or less which have
stayed relatively under the radar of larger retirement fund
Amy Feldman and Sree Vidya Bhaktavatsalam for
Bloomberg BusinessWeek report that
the company wants a larger slice of the $2.7 trillion 401(k)
retirement market, and it's using its position as the world's
biggest manager of ETFs to win over small companies. [
How ETFs Can Solve the Retirement Problem.
Will the strategy also help ETFS gain more of the retirement
which is BlackRocks' ETF family, is such a large fund family that
many consider it to be the bellwether of the industry's direction.
Many feel that the induction of ETFs into the retirement industry
is inevitable. [
Why ETFs Are Replacing Mutual Funds in 401(k)
The ShareBuilder plan itself is awesome, too. You can choose to
manage your own holdings by picking from a list of ETFs they have
available, or you can utilize one of their all-ETF model
portfolios. You can easily keep track of how your account is doing
iShares estimates that its ETFs used in 401(k) plans and other
retirement accounts could top $100 billion over the next 10 years.
Everything You Need to Know About 401(k) Plans.
is a great option for small- to mid-sized 401(k) plans
We recently switch our 401(k) plan to
, which offers and we've been impressed with the level of service
offered so far. ING's ShareBuilder 401k works with small companies
to give them a low-cost retirement plan that utilizes only ETFs. [
More on ShareBuilder's Business.
Our previous 401(k) provider only utilized mutual funds. We're
big fans of ETFs over here - we use them for our clients and we
write about them all day. It only made sense to use them for our
employees, as well. That's what led us to seek out ShareBuilder. [
Why 401(k)s Are Shifting to the Younger Set.
Setting up our account and transferring our 401(k)s over to the
ShareBuilder platform was ridiculously easy and everyone we spoke
to every step of the way was incredibly helpful. After discussing
our business with us and what we were looking for, our rep sent
over a page detailing the mutual funds in our current plan, the
fees we were paying and how much we could save over five years.
Here's a hint: employer and employee combined savings number in the
After you fill out your paperwork, there are reps to help you
every step of the way, including reps from PAI, the plan's
administrator. It was all so easy, in fact, that the hardest part
was gathering our old 401(k) account information and sending it
over to ING. [
How to Prepare for Retirement With ETFs.
ShareBuilder and BlackRock aren't the only businesses working to
make ETFs a staple in 401(k) plans.
uses index mutual funds in its own 401(k)s; perhaps ETFs won't be
created a business unit in 2007 that delivers 52 ETFs to the 401(k)
marketplace. A number of small businesses, such as
have been the early adopters of ETFs in retirement plans, but once
larger companies and corporations join in, the growth may really
Many of the larger providers have shut down the idea of using
ETFs on a 401(k) platform. The argument is that ETFs are not
suitable for long term retirement savings. On the contrary, lower
fees could mean the difference between an okay retirement and a
very nice one over the long term.
The rush to get ETFs into more 401(k) plans is increasingly
important. Assets in such plans are estimated to grow 41% by the
end of 2014, to $3.7 trillion in assets. ETFs currently account for
between $5 billion and $10 billion of 401(k) assets.
For more stories about ETFs, visit our