The Benefits of Personalization in Defined Contribution Plans

Analyzing value in managed account and financial wellness programs and features

Article published: October 24, 2023

Research published by Cerulli Associates, with support from Edelman Financial Engines. 

As the needs of plan participants shift and expand, defined contribution 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.

  • 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).
  • 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.
  • Some plan sponsors and their consultants focus heavily on the investment performance relative to Target Date Fund vintages in their evaluation process.
  • 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.