Charles Schwab announced the first-year results (subscription required) of 50 plans and 36,000 participants for their “Index Advantage” DC product. Index Advantage includes only passive mutual funds designed to lower costs, which includes third-party advice. According to the provider, costs were reduced by 77% and 90% for participants using the third-party advice, versus 4% in other plans (due to auto enrollment). Schwab also claims that Index Advantage participants saved twice as much as those in other types of plans, and were better diversified.
The Index Advantage product is available for plans with $20 million in assets or more; a pure ETF-only product is imminent.
