In its first report, the new Morningstar Center for Retirement and Policy Studies has found that an “alarming” amount of money, $4.61 trillion, flowed out of defined-contribution plans from 2011 to 2020.
“These constant outflows, likely due mostly to rollovers and cash-outs, reduce plan assets,” Morningstar said in a release. “More assets in the defined-contribution system would help more sponsors gain the leverage to demand lower fees from asset managers and drive down costs for end investors.”
In addition, the report found that some people who participate in small plans pay around double the cost to invest as participants at larger plans.
“This is an issue industry leaders and policymakers must address because these differences in fees can add up, leaving participants with fewer assets at retirement and less ability to achieve their retirement goals,” Morningstar said.
The company said it created the center to dive more deeply into areas like plan investment holdings, plan quality and participants costs.
The Center's primary research team includes Aron Szapiro, head of retirement studies and public policy at Morningstar Inc./Morningstar Investment Management, as well as Jack VanDerhei, director of retirement studies for Morningstar Investment Management, and Lia Mitchell, senior analyst of policy research for Morningstar Inc.
VanDerhei joined the firm Tuesday and will be responsible for modeling the impact policy changes and proposals might have on U.S. retirement preparedness, as well as the effects of plan sponsors' decisions on participants. He was previously research director at the Employee Benefit Research Institute.
Chicago-based Mesirow Fiduciary Solutions adds flexPATH's plan-level outsourced fiduciary book, boosting its retirement market reach to $164 billion.
Also, Raymond James's employee advisor channel adds breakaways from Wells Fargo and Stifel, while UBS welcomes an ex-Morgan Stanley duo in Indiana.
It promised guaranteed principal and 10% monthly returns. The SEC says it invested nothing.
Ten years after entering the fee-based annuity market, MassMutual Ascend says nearly half its lifetime sales came in the past two years alone – but barriers remain among fee-only advisors.
Amplify, WealthReach, Zeplyn and Zocks have unveiled partnerships aimed at automating portfolio management, content creation, account opening, and client communication.
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