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ShareBuilder 401k Reports Growing Demand for Online, ETF-Based 401(k) Plans

Index-based Plans Gaining Popularity Among Small Business Owners, Investment Advisers

11/06/2007:
BELLEVUE, Wash. — Small business owners and the financial advisers that serve them are the latest groups to embrace Exchange Traded Funds (ETFs) according to ShareBuilder 401(k). With over 1,250 ETF-based 401(k) plans sold to small businesses in just 2 years, ShareBuilder 401(k) is a leader in providing100 percent ETF-based 401(k) plans.

"Over the past year, we've seen a sharp increase in demand from small business owners who have come to recognize ETFs as a smarter long-term investment strategy," said Stuart Robertson, General Manager of ShareBuilder's Small Business Group. "Index funds have tended to outperform most actively managed funds and investors are beginning to take notice."

One example of this stronger performance can be seen in returns delivered by the S&P 500 index between 1980 and 2005. During the 25-year period, the index produced 42.5 percent higher returns than its actively managed peers, according to the Bogle Financial Markets Research Center. While there are no guarantees on the future performance of any type of fund, index-based funds typically have lower expense ratios than actively managed funds and nearly eliminate the need for investors to worry about overcoming the cost and tenure of fund managers.

"ETFs are especially well-suited for 401(k)s, as they have very low expense ratios with some even lower than index-based mutual funds," said Robertson. "For example, the expense ratio of Vanguard's S&P 500 Index mutual fund is only 0.18%. That's still nearly 40% more than the SPDRs 500's 0.11% expense ratio. And our proprietary online solution also eliminates trading costs that are common with most ETFs sold retail."

The combination of stronger returns, lower fees and simplified sign-up is also attractive to registered investment advisers who embrace ETFs and seek to offer ShareBuilder's ETF-based product platform to their small business clients.

"We welcome the addition of advisers to our community as they address an attractive slice of the small business market," said Robertson. "We focus our efforts on small businesses that prefer to shop online while advisers typically serve clients that prefer face-to-face interactions and may have more complex financial needs."

About ShareBuilder 401(k)

ShareBuilder 401(k) provides easy, affordable and smart 401(k) retirement plans for small businesses, ranging from the self-employed to those with 25 or even more employees. ShareBuilder 401(k) is a leader in providing 100% index-based ETF investments (plus a money market) in 401(k) plans. As part of ShareBuilder Corporation, which operates ShareBuilder.com, a leading online brokerage, ShareBuilder 401(k) offers a suite of on-demand services that make it simple for employers and employees to open and manage their retirement plans online at www.sharebuilder401k.com. ShareBuilder 401(k) plans provide market-efficient investments and model portfolios that make it easy for employees to select the smart investments to help them get on track to meet their retirement goals. Customers can also take advantage of ShareBuilder 401(k) Consultants, Customer Success Managers, and Customer Care Agents to receive assistance in choosing and managing their retirement benefits.

Media Contact
Cathy MacFarlane
302.255.3577
mediainq@sharebuilder.com

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