With the GAO report, congressional hearings, the DOL 408 project and class action suits on revenue sharing with mutual funds, what advantage do ETFs have?
(In November 2006, the United States Government Accountability Office (GAO) published a report titled Changes Needed to Provide 401(k) Plan Participants and the DOL Better Information on Fees. The GAO did the study because of concerns about the effects of fees on participants’ retirement savings. The GAO recommended that Congress should amend the Employee Retirement Income Security Act (ERISA) to require fee disclosure to participants and plan sponsors by 401(k) service providers. The DOL 408(b)(2) project requires plan sponsors to disclose indirect compensation on their 5500s starting in 2008 and require service providers, such as advisers and record-keepers, to disclose indirect compensation to plan sponsors and will mandate disclosure of indirect compensation to plan participants.) ETFs do not have any of the baggage of hidden fees that mutual funds have. The hidden fees include 12(b)1 fees, revenue sharing (sub-TA fees), multiple share classes and internal brokerage costs. Therefor