Millennials favor exchange-traded funds (ETFs) more than other generations, according to a report by Charles Schwab about trends in retirement plan self-directed brokerage accounts (SDBAs). Millennials are a considerable portion of the U.S. workforce, The low cost of ETFs is often cited as a positive feature of the funds.

Yet, even as retirement plan fees are driven down and have been the subject of much litigation, ETFs have not been widely accepted by defined contribution (DC) plan sponsors. Tom Skrobe, head of client solutions at WisdomTree Asset Management, says ETFs are not very popular in DC plans for a variety of reasons, including recordkeeping hurdles and fiduciary concerns about allowing intra-day trading. Some worry that intra-day trading could distract participants from long-term investing goals.

However, Edward Gottfried, director of product at Betterment for Business, says the majority of assets in 401(k)s are invested with legacy platforms that were built with the assumption that only mutual funds were available to them. He adds that the DC plan recordkeeping platforms that existed early on were built on the backs of mutual fund trading systems. “They were built to recordkeep mutual funds and can’t handle the intra-day trading of ETFs,” he says. “The reason ETFs are not mainstream for DC plans has nothing to do with retirement investors. It is purely about who has been recordkeeping 401(k)s for the last 30 years.”

Gottfried continues on to say that there are no issues natively posed by ETFs to prevent them from being used in retirement plans. In fact, Betterment is one of several providers that has built its own recordkeeping and custody platforms for an all-ETF 401(k).

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