Despite the mutual fund industry’s domination of the 401(k) business, ETF insiders seem intent on giving them a run for their money.
WisdomTree Investments has announced the creation of a business unit designed to deliver the full benefits of ETFs to the 401(k) marketplace. The company has hired 401(k) industry veteran Al Shemtob to lead the effort as director of retirement services.
“Investors and advisors have become familiar with the many benefits that ETFs offer and are now looking to utilize them in their 401(k) plans,” says Jonathan Steinberg, WisdomTree CEO. “The 401(k) market, with over $2.4 trillion in assets, is an untapped channel for ETF growth and we believe WisdomTree’s ETFs are particularly well-suited for the retirement market.”
Arthur Levitt, senior advisor to WisdomTree puts it this way: “The Pension Protection Act of 2006 will undoubtedly affect the development of the 401(k) marketplace. The movement towards greater transparency, lower fees and greater disclosure of revenue sharing agreements provides a catalyst for change likely to benefit retirees. It will also provide opportunities for thoughtful, low-fee exchange-traded funds like those created by WisdomTree.”