Evolving QDIAs

Farrell noted an increasing interest in blend implementation among investments. Specifically, 47% of target-date investment management style consultants are most likely to recommend a blend of active and passive strategies, an increase from 36% in previous findings. Seven percent of consultants say they would suggest an active strategy, at no change from the prior year, while 47% would recommend passive, a decrease from its previous 59%.

Collective investment trusts (CITs) are also experiencing shifts in adoption. The investments, which surpassed mutual funds as the most popular target-date vehicle in 2024, have slowly climbed in assets and market share. CIT assets accounted from 24% of total assets in 2023, according to T. Rowe Price’s findings.

Looking at the year ahead, Farrell recommends plan sponsors rethink managed accounts and opportunity for personalization heading into retirement. “Plan sponsors who are happy with their QDIA can still offer participants the experience of personalizing their target-date investment,” she said during the panel.

Next: Different priorities for retirement income