“Do it for me” investment solutions, including target date funds and managed accounts, are increasingly popular, and Fidelity’s managed account platform recently surpassed one million1 accounts, with nearly 300,000 of them in workplace savings plans like 401(k)s and 403(b)s. However, as the number of employees using these options increases, employers are demanding more flexibility and choice to give their employees the professionally managed strategy that best fits their retirement savings needs.
In response to this demand, Fidelity has released two enhancements: Smart QDIASM. Most employees who are automatically enrolled in their 401(k) are defaulted into an age-appropriate target date fund.2 However, employees have different investing needs, and with Fidelity’s Smart QDIA3, employers can make use of two defaults – a target date fund and Fidelity’s managed account service, Fidelity® Portfolio Advisory Service at Work (PAS-W) – to help keep employees on a path to financial security. Employers can customize and set criteria to determine each employee’s default investment based on factors including age, account balance and other financial indicators. Index-based managed account. Fidelity is expanding the managed account offering to include an index-based managed account, which will track to a market benchmark using index funds from the employer’s 401(k) lineup. The Index-based managed account complements Fidelity’s Core offering and gives employers the option to choose the solution that best aligns with their investment philosophy and plan objectives.
“As more employees view their retirement savings as part of their overall financial wellness, employers need flexible solutions that can help their employees’ investment needs,” said
Fidelity added more than 750 plan sponsors to its PAS-W business for a total of nearly 4,500 clients at the end of 2016, up 16 percent over the prior year.
Enrolled participants in the service grew 26 percent in 2016 to 300,000, which is five times the number of enrolled participants from five years ago.
Assets under management grew 41 percent to
Fidelity’s overall managed account business, including both Portfolio Advisory Services and Portfolio Advisory Service at Work, grew to
While most of Fidelity’s business represents organizations that added a managed account to their benefits platform for the first time, many clients were in a competing managed account and replaced it with Fidelity’s offering. In 2016, clients representing 90,000 employees and nearly
“An increasing number of employers are recognizing that a managed account is another great option for people who need help managing their own retirement savings or staying on track as they transition into and live in retirement ,” added Moorjani. “Fidelity believes in guiding participants to the right solution that meets their retirement savings needs, whether that is a target date fund or a managed account.”
The integration of PAS-W offers employees a consistent cross-channel experience when saving, planning and investing for retirement, whether they choose to do it themselves or enroll in a professionally managed account. For more information on PAS-W, plan sponsors or consultants can contact their Fidelity representative. About Fidelity Investments Fidelity’s mission is to inspire better futures and deliver better outcomes for the customers and businesses we serve. With assets under administration of
Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
Diversification/asset allocation does not ensure a profit or guarantee against loss.
Fidelity® Portfolio Advisory Service at Work is a service of
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