As regulators focus more on the fees participants pay for their401(k)s, Charles Schwab is launching a 401(k) plan that offers onlyindex mutual funds, which are often much less expensive thanactively managed funds. The new product, Schwab Index Advantage,also provides personalized investment advice and access to anFDIC-insured bank account for investors.

Schwab Index Advantage will have a line-up of about 40 indexfunds in 16 different asset categories, says Steve Anderson, seniorvice president at Schwab Retirement Services.

“That's all we're going to make available, passive index fundsto drive the cost down as low as we can,” Anderson says. “Whatwe're trying to do is create a very diversified portfolio at thelowest cost.”

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Susan Kelly

Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.