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Our company is in the middle of flipping ownership, and is deciding which company to have run their 401k. (Fairly large company so I'm about 10 steps down the ladder from those making the decisions). They mention that there are consultants looking at plans, there are salespeople bringing forward their funds, etc. Now in general people would agree that it would be nice if we could have our funds at Ameritrade for instance in an IRA, where I could buy any fund I wanted.

Why do most companies (if not all?) have their 401k's so limited in the investments we can choose? I have 1 large cap, 1 mid cap, 1 small cap, 1 international, etc etc. At least most of my funds are public enough that I can read reviews about their performance, my wife's companies funds are called "Large cap fund", etc etc.

So why do companies go with such limited choices? What is the reason that our 401k accounts can't be run by Vangard for instance and we could have access to All of their funds?
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