Last week, we focused on target-date funds, specifically their composition and glidepaths. But that survey spurred a number of reader questions—about managed accounts.
A recent report by Cerulli Associates notes that, as of the fourth quarter of 2020, the top nine DC managed account providers comprised more than $400 billon in DC assets and the vast majority of DC recordkeepers now partner with at least one managed account provider. Moreover, more than 4 in 10 plans with at least $250 million in assets offer a managed account (28% do overall, according to the report), and 17% of plan sponsors overall plan to offer a managed account in the next 12 months.
The simplicity of target-date funds has always been something of an Achilles’ Heel—the reality that truly effective asset allocation requires more than an approximate retirement date—and yet it’s that simplicity that has also allowed them to be incredibly effective at garnering assets and adoption by defined contribution retirement programs.
A recent report cites a growing body of research demonstrating that participants who use managed accounts tend to save more for retirement, both when the service is offered as an opt-in and opt-out. Managed accounts participants also tend to reduce allocations to employer stock and have more efficient portfolios, among other potential benefits.
So, this week we’d like to get your perspective(s) on managed accounts—pro, con, or something in between. You can check out this short reader poll at https://www.research.net/r/BV7XCR3.
And—guess when we’ll have it all sorted out for you?
