Why a Managed Account Is an Ideal Option Now

March 29, 2021
Man working on laptop at his desk

The increase in remote workers during the pandemic is definitely newsworthy. Estimates show that as many as 42% of U.S. workers are now working from home full-time.*

For advisors and retirement plan sponsors, the increase is more than newsworthy. It’s affecting their ability to keep plan participants engaged. Many employers can no longer rely on office presentations and in-person education meetings. And remote workers — who are spending most of their workdays online — may be less than interested in attending a virtual meeting about their plan.

Here’s a solution to these challenges: Add a managed account service to a retirement plan. A recent Morningstar report on local and remote workers supports this approach.

The Morningstar study, which included more than 100,000 participants in 401(k) plans, looked at:

  • How local and remote workers differ in how they make investment decisions
  • Notable demographic differences between the two groups
  • Ways for plan sponsors to enhance retirement plan benefits for remote workers

Check out Morningstar’s findings:

  • When it comes to 401(k) plans, remote workers are less likely to use default investments, in particular target date funds. They’re more likely to use a personalized advice option, such as a managed account.
  • A growing body of research shows that participants who use managed accounts tend to save more for retirement. This is true for both opt-in and opt-out scenarios.
  • Participants with access to a managed account tend to reduce allocations to employer stock and have more efficient portfolios, among other potential benefits.
  • Remote workers tend to be older and have higher salaries, higher balances and higher deferral rates.
  • Only 52% of plans currently offer managed accounts.

Many companies — and probably many of your clients — are expecting to continue some form of remote work in the near future. Talk to your clients about adding a managed account option, like Mainspring from The Standard, to help all of their employees save for retirement.

It’s another way you can support plan sponsors without adding to your workload.


*Out of Sight, but Not Out of Mind: Helping Remote Workers With Retirement Managed Accounts, Morningstar, January 2021