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|Subject: Re: Limited Fund Choice in 401K--Au Contraire||Date: 7/25/2005 10:54 AM|
|Author: ascenzm||Number: 248177 of 722103|
A few years ago, I learned about a hush-hush "Trojan Horse" option from the 401(k) experts at Schwab. Turns out there was a way to sneak several Schwab or Vanguard or T. Rowe Price funds into a plan managed by Fidelity, for example. And you didn't have to pay extra.
And it's so easy! A simple technology called "Open-Architecture" was available all along that gives any employee in any 401(k) plan in any American company a way to consolidate all their accounts in one location and also access to all financial markets and every other fund company. But most companies didn't know about it.
So why the secrecy? Because by keeping the hush-hush Open-Architecture option a secret, a plan manager could maintain its monopolistic hold over a company's 401(k) plan and its employees. In fact, several sources tell me the competition to get lucrative 401(k) plan-management contracts is so intense that not only do very few American workers know about the Open-Architecture option, most corporate executives who pick and hire a plan manager also are the dark.
Very interesting. I'd love to dump my 401K plan's international fund, which is not publicly available and replace it with Vanguard international funds. It would also be neat to access a commodities fund such as PCRIX via my 401K.
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