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In 2Q 2023, Cerulli Associates was engaged by ÃÛѨÊÓƵ, the leading provider of workplace managed accounts and independent financial planning, to publish a whitepaper highlighting the benefits of personalization in defined contribution plans.

As the needs of plan participants shift and expand, defined contribution (DC) plan sponsors recognize that many stand to benefit from more personalized services, including financial wellness, financial planning, and managed account programs. With an array of personalized financial services and providers from which to select, plan sponsors must determine which type of personalized solution(s) and which solution provider(s) is the best fit for their plan participant base.

KEY FINDINGS:

• Plan sponsors continue to seek out ways to make their retirement offerings more personalized to their participants’ needs. With increasingly diverse participant populations, addressing the needs of participants requires programs and features that can fill in gaps left by traditional offerings (e.g., target-date funds). In determining ways to make their offerings more comprehensive, personalized, and customizable, plan sponsors should consider the potential value of additional programs.Ìý
• Many plan sponsors express a preference for personalized financial solutions that offer participants the ability to speak with a financial advisor, especially for participants who have complex financial situations and planning/wellness needs. Plan sponsors should investigate the quantitative and qualitative impact of these one-on-one engagements on the financial wellbeing of their participants.
• Some plan sponsors and their consultants focus heavily on the investment performance relative to target-date fund vintages in their evaluation process. When assessing managed account programs, plan sponsors should look beyond the programs’ respective investment methodologies to uncover the full impact these programs can have on participant behavior and their long-term financial outcomes.
• Some plan sponsors express concern about retirement providers cross-selling investment products or using their workplace businesses to expand into other types of relationships with end investors. Plan sponsors should be cognizant of these conflicts of interest and actively address them with managed account providers.

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