Retirement income takes center stage in our latest annual survey of large-and mid-sized industry consultants. Six in 10 say plan sponsors wish to keep retirees invested in their plans – nearly a third higher than last year. The survey indicated retention depends chiefly on providing distribution flexibility, education and tools, and retiree-focused investment options.
Plan sponsors turn to consultants mainly for evaluation of target-date funds and plan costs, and simplification of the investment menu. The singular focus on fees may be waning.
Consultants say white label and custom target-date fund strategies are critical to constructing potentially superior portfolios. Consultants also report strong support for active management in both U.S. and non-U.S. bond strategies and emerging market equities.
From a business perspective, consultants face a high degree of overlap in the services they provide, making differentiation critical to success. The fastest-growing requests include cost and fee analyses, record keeping searches and manager selection services.