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SageView: Are Managed Accounts Right for DC Plans?

Aside from offering diversified and professionally managed portfolios, managed accounts may also add value relative to other commonly used asset allocation strategies, according to a recent report by SageView Advisory Group.

Although these arrangements can add cost and complexity to a traditional fund lineup, they can also provide a unique solution for retirement savers that is significantly more customized than an off-the-shelf balanced or target-date fund, according to the July 2018 white paper, “Managed Accounts Within Defined Contribution Plans.”

Author Mallory Armijo, CFA, reviews several considerations to take into account when evaluating whether a managed account is appropriate for a particular plan. She explains, among other things, that sponsors will need to conduct a robust due diligence process, including evaluating employee demographics to determine whether a managed account is likely to add significant value to the group.

Armijo emphasizes that, while managed accounts are a complex solution that may not be a good fit for all plan sponsors, they offer some unique benefits that may be worth considering.

Other SageView white papers are posted here.