Is there a chance that ETFs might break into the 401(k) business? CNBC columnist Neil Plein says the existing resistence, based on low returns for advisors and institutions, might change with a new payment system.

Plein, of Invest in Retire, says there's been little progress in the past because of the difficulty of handling fractional share purchases — and that advisors believe they'd make less money using ETFs. 

Plein points to a new system pioneered by Darwin Abrahamson which splits the 401(k)s' basis points more evenly: While the average 401(k) charges about 150 basis points, Abrahamson did a presentation at the IndexUniverse Inside ETF conference where he said he could do ETF model portfolios at an average cost of 70 basis points.

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and events
  • Access to other award-winning ALM websites including and

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.