NEPC has been featured in an article by PlanSponsor for our outlook on managed accounts. View excerpts below or the full article on PlanSponsor’s site here.
Managed accounts have been around for more than 20 years as a defined contribution plan option, but the tailored investment vehicles have evolved considerably over the years, allowing plan sponsors to consider them as a tool to offer a retirement income solution to their participants.
. . .
Some firms have been more critical of managed accounts, largely because of the fees that are often attached to the personalized service. For example, NEPC argued in a report published in June that after including the fee charged by the managed account provider, savings advice has a “negative return on investment after the first year.”
NEPC argued that this is mainly because managed account fees are charged based on participants’ total assets rather than on changes to their annual savings.
“We believe savings advice should be a one-time charge commensurate with the incremental change in participant’s savings rate, rather than a recurring expense,” NEPC stated in its report.
Click here to continue reading the full PlanSponsor article.