Why Aren’t There More Managed Accounts In 401ks?

Surprise - younger workers want more.

Surprise - younger workers want more.

Whadaya know? Financial education (or a lack thereof) strikes again.

Some employees love managed accounts and some don’t—the difference is in the awareness. Fidelity Investments found that to know managed accounts is to use them. Here are the highlight:

On the flip side, Fidelity’s research showed that those who don’t use managed accounts say it’s because they need more education on why the offering could be right for them. Here are the lowlights:

Nearly 39 percent of those who don’t use a managed account say they lack understanding of what is being offered for the benefit, and 25 percent said that not knowing enough about them is a major barrier to adoption.

However, once it’s explained what a managed account is and how it offers ongoing professional management of their retirement accounts:

As employers look to broaden adoption of and increase understanding around workplace managed accounts, below are best practices for educating employees:

“The good news is that awareness and education around managed accounts helps drive overall participant engagement and action,” said Chad Elliott, senior vice president of Fidelity’s workplace managed account business. “In general, participants who respond to the educational programs are more likely to make a change to their asset allocation, increase their savings rates and review their retirement plan.”

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