Brooks Hamilton says:(Brooks Hamilton is founder of Brooks Hamilton & Partners, which designs 401(k) plans for corporate clients such as Neiman Marcus and Frito Lay.)
“Forcing novices … to direct their own investments was not really a good thing to do. I used to ask the CEO, CFO of my major clients,…often in a conference room [after] some young employee would bring in coffee, and as they would be leaving, I would ask the CEO, ‘Would you allow that employee to direct the investment of your account in the 401(k) plan?’
They always thought I was some kind of idiot: ‘Of course not. I wouldn’t let them touch my account with a 10 foot pole.’ And I said, ‘But you force them to manage their own!’ And they are running their money into the ground.”
“If Fidelity manages my account, does that mean I save more? Not at all… Does it mean I earn more? Probably not. Because… it’s fees and expenses, and unfortunately most fees and expenses are not even revealed.”
John Bogle (founder of Vanguard) testified before the Senate in November of 2003. He basically said… from  to 2002, when the [stock] market did a 12 percent [annual] return, the average investor [in mutual funds], according to Mutual Fund Data Collector DALBAR, did 2.7 percent!
“That’s 2.7 percent growth per year…So now the solution is to turn it over to them? I thought that’s where we had been. And it hasn’t worked too well. It hasn’t worked too well. …I regret the fact that our retirement income strategy in major companies is the 401(k)… I know it’s flawed.