A broad coalition of financial firms, trade groups, and Republican politicians, joined by a handful of Democrats, spent the past year mounting a fierce counterattack to the Labor Department rule promising to shake up the $14 trillion in assets parked in 401(k)s and individual retirement accounts….
The Labor Department also retreated from language that would have explicitly favored low-cost investments and declared instead that an adviser isn’t required to recommend the lowest-fee option if another product might be better for a client. “The Yugo may be the lowest priced car, but it isn’t a very good car,” Mr. Perez told reporters in explaining one of the changes
I think any objective person looking at the choice of an index fund or ETF with fees as low as .05% as analogous to a Yugo…seems Yugo’s no longer exist because they truly “weren’t a very good car” and investors voted with their wallets and walked away from them/. On the other hand, trillions have flowed into index funds and ETFs from both institutional and individual investors (including some of those proprietary mutual funds). It’s difficult to believe they have all invested in the equivalent of a Yugo (and continue to pour money into these funds) bypassing proprietary funds which would have better met their needs.