Hardly surprising that the top investment product story of 2020 would involve Vanguard. The low-cost provider shocked the 401k space in July when it announced in July that it would outsource day-to-day operations of its DC recordkeeping business to IT services firm Infosys.
Plan sponsors would continue to be served by Vanguard’s relationship management teams, strategic plan design, and communication staff, however.
Additionally, Vanguard will oversee all aspects of its investment management and guidance for both sponsors and participants, while participant phone calls will be serviced by both Vanguard and Infosys.
“For decades, Vanguard has propelled best practices and innovation within our DC business and across the industry to steward the financial futures of millions of Americans saving for retirement,” Martha King, managing director of Vanguard Institutional Investor Group, said in a statement. “Our partnership with Infosys will embolden these efforts, enabling a groundbreaking approach to plan administration. Coupled with Vanguard’s increasing investment in advice capabilities and client experience, we will set a new bar for personalization, ease, and efficiency for sponsors and participants alike.”
Partnership enhancements
Planned enhancements through the partnership for sponsors included AI-enabled analytics capabilities, visibility of participant behavior, and improved operational support.
In addition, the companies claimed the partnership “will accelerate Vanguard’s ongoing efforts to build a state-of-the-art participant experience, including a redesigned participant website, integrated advice, and intuitive technologies.”
Approximately 1,300 Vanguard roles that support full-service recordkeeping client administration, operations, and technology will transition to Infosys.
All Vanguard employees currently performing these roles will be offered comparable positions at Infosys in close proximity to Vanguard’s offices in Malvern, Penn., Charlotte, NC, and Scottsdale, Ariz.
Transitioning employees will receive the same salary, comparable benefits for a transition period of 12 months, plus meaningful incentive opportunities.
King, currently head of Vanguard Institutional Investor Group, will also transition to Infosys to head the firm’s Mid-Atlantic Retirement Services Center of Excellence and serve as the firm’s Chief Client Officer.
Vanguard currently has $1.3 trillion in DC plan assets.