Vanguard has amassed nearly $7 billion in assets under management since jumping into the small-business retirement plan business and it’s looking for more.
That’s according to Vanguard CEO F. William McNabb III, who recently spoke with journalists in London about the company’s latest plans for that segment of the market.
“Market forces haven’t worked that clearly” for small-business plans, which are still paying higher fees than larger plans, he told the Wall Street Journal. But that could be about to change, with McNabb noting, “We’ve entered the small-plan market very aggressively.”
Vanguard, in fact, has been looking for growth in the small-business end of the market since it entered the fray in 2011. As of the end of 2014, it had amassed $6.7 billion in assets under management in its small-business products, from 2,678 pension plans and 126,956 participants.
The firm introduced its lower-cost target-date funds at the end of February, with the launch of an Institutional Target Date Retirement Fund lineup.
McNabb indicated that Vanguard would further reduce fees as business grows, applying additional pressure to its competitors in the process. “I think you’ll see the fees in the small end come down,” he said.
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