A new study by T. Rowe Price reveals retirement income and personalization as areas of growing concern for consultants and advisors working with defined contribution plans.
The findings come from the 2024 Defined Contribution Consultant Study, which surveyed 35 leading firms on trends in retirement, target date solutions, and financial wellness.
Among numerous significant shifts, the study found that in 2021, 59 percent of consultants and advisors reported that more than half of their DC plan sponsor clients had no clear stance on the issue; by 2024, that figure dropped sharply to 19 percent. This trend suggests that more plan sponsors are actively addressing retirement income as part of their plan offerings.
“Consultants and advisors are looking for solutions that offer choice, personalization, flexibility and are cost-effective,” Jessica Sclafani, global retirement strategist at T. Rowe Price, noted in a statement.
Personalization, particularly for participants nearing retirement, was a recurring theme in the study. While managed accounts are gaining popularity as an opt-in investment option, target date solutions continue to be the most common default investment alternative.
Read more: Which investments are best for retirement?
The study also found strong support for a transition from mutual fund-based target date solutions to collective investment trusts, primarily due to their cost efficiency. Respondents showed a preference for target date solutions that incorporate both active and passive investment strategies.
“A blend approach has the advantage of offering a potentially lower-cost investment and reduced tracking error,” Sclafani said.
Changes in fixed income investment strategies were also highlighted, driven by the post-pandemic escalation in interest rates. According to the study, 89 percent of respondent firms now prioritize diversification opportunities, compared to 48 percent in 2021. Additionally, there is growing support for non-traditional bond allocations within target date solutions, with active management in areas such as high yield bonds and emerging markets debt viewed as the best strategy when it comes to return-seeking fixed income approaches.
The research also anticipates growth in in-plan emergency savings programs, with 70 percent of firms expecting such offerings to become more common within the next three to five years.
Eliseo Prisno, a former Merrill advisor, allegedly collected unapproved fees from Filipino clients by secretly accessing their accounts at two separate brokerages.
The Harford, Connecticut-based RIA is expanding into a new market in the mid-Atlantic region while crossing another billion-dollar milestone.
The Wall Street giant's global wealth head says affluent clients are shifting away from America amid growing fallout from President Donald Trump's hardline politics.
Chief economists, advisors, and chief investment officers share their reactions to the June US employment report.
"This shouldn’t be hard to ban, but neither party will do it. So offensive to the people they serve," RIA titan Peter Mallouk said in a post that referenced Nancy Pelosi's reported stock gains.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
