Charles Schwab Corp.’s recently released low-cost 401(k) plan that is comprised entirely of index mutual funds, is gaining some traction among the retirement crowd, Reuters reports.
Schwab, which has about $1.83 trillion in client assets, launched its low-fee plan in January ahead of new U.S. Department of Labor rules requiring 401(k) plan providers to disclose the fees they charge. According to CEO Walt Bettinger, several hundred clients have expressed interest in the program, while at least 10 have committed to it so far.
"We expect that to continue to accelerate very rapidly,” he said, during Schwab's interim business update. “It's very attractive to fiduciaries, relative to trying to select actively managed funds, because it uses all indexed products."
The San Francisco-based brokerage also reportedly plans to launch a version of Schwab Index Advantage that will use only index-based exchange-traded funds in 2013.