At Prime Capital Retirement, our mission is to help employers and plan sponsors deliver retirement solutions that are not only compliant but also deeply valuable to participants at every stage of their journey. Retirement planning is constantly evolving. What works today may shift tomorrow due to new regulations, market trends, or technological innovation. Target-date funds (TDFs), for instance, have been a cornerstone of workplace retirement plans for nearly 30 years thanks to their simplicity and broad effectiveness. But as participants’ needs become more complex, so too must the solutions that support them.
Helping Participants Achieve Better Retirement Outcomes with Advisor Managed Accounts
Why More Participants Are Going It Alone
In recent years, more participants are trying a do-it-yourself (DIY) approach to retirement planning. Some are frustrated with generic advice. Others believe they can outperform benchmarks on their own. Regardless of the motivation, the trend highlights a growing demand: participants want value from their retirement plan.
However, data consistently shows that working with a knowledgeable advisor can improve outcomes. Vanguard’s Putting a Value on Your Value study found that disciplined, advisor-led retirement planning could yield up to a 3% net benefit annually compared to DIY investing.
Morningstar’s research echoes this. In their 2013 paper Alpha, Beta, and now…Gamma, they showed that advisor-led planning—which includes tax efficiency, holistic asset allocation, flexible withdrawal strategies, and Social Security timing—can increase income in retirement by over 20%, on average.
Participants Want More. Enter Advisor Managed Accounts.
While the tools may evolve, the questions participants ask remain remarkably consistent:
- How much income will I need in retirement?
- How much should I save each year?
- When can I retire?
- How should I invest—and adjust—as life changes?
Participants don’t just want information; they want guidance that’s relevant, personal, and actionable. That’s where Advisor Managed Accounts (AMAs) come in.
What Is an Advisor Managed Account?
An Advisor Managed Account is a personalized, goal-based retirement solution that provides participants with:
- Recommended savings rates
- Target retirement age
- Tailored investment strategy
- Ongoing discretionary investment management
At Prime Capital Retirement, our Advisor Managed Accounts automatically adjust the investment mix based on each participant’s evolving circumstances—offering a highly customized experience with fiduciary oversight.
Why Plan Sponsors Are Embracing Managed Accounts
Advisor Managed Accounts are gaining traction because they offer:
True Personalization – No two participants are the same. AMAs build plans tailored to the individual, not the average.
Improved Outcomes – Plans are built around personalized income needs and real-time adjustments to optimize success.
Integrated Experience – A seamless user interface supports ongoing participant engagement.
Full Lifecycle Support – Guidance doesn’t stop at retirement—it continues through it.
What Makes an Effective Advisor Managed Account?
An effective AMA solution should meet these four criteria:
The Measurable Impact of Managed Accounts
Still wondering about the results? A 2019 Morningstar study of over 60,000 participants found that:
- 71% of “off track” participants increased their savings.
- Average increase in savings was nearly 33% (or 2% of salary).
- Employer match maximization rose by 12%.
- Retirement wealth increased by 47%.
- A 30-year-old using Managed Accounts could expect up to 56% more income in retirement, even after fees.
NextCapital’s 2020 report found similar gains: up to 0.95% to 7.85% in value add, depending on the level of participant engagement with savings and retirement age recommendations.
Target-Date Funds or Advisor Managed Accounts? Both.
Plan sponsors often ask: Should we offer Target-Date Funds or Advisor Managed Accounts? The answer is—you don’t have to choose.
Target-Date Funds (TDFs) are effective for early-career participants with simpler financial needs. TDFs offer a generalized glide path based on expected retirement age—great for getting people started with a low-maintenance option.
Advisor Managed Accounts, on the other hand, are ideal as participants’ financial lives grow more complex. With personalized income planning, flexible strategies, and active management, AMAs deliver the guidance participants need as they approach retirement.
Hybrid QDIA: The Best of Both Worlds
Qualified Default Investment Alternatives (QDIAs) play a crucial role in 401(k) plans—ensuring participants are invested even if they don’t make their own elections. While many plans rely on TDFs as the default, a Hybrid or Dynamic QDIA approach is emerging as a smarter, more flexible alternative.
In a Hybrid QDIA model:
- Younger participants are automatically placed in a TDF appropriate to their age group.
- As they reach a specified age (e.g., 45 or 50), they transition into an Advisor Managed Account.
- This shift happens automatically, unless the participant opts out.
This model offers the efficiency of automation with the personalization of advisory services, while also helping mitigate fiduciary risk for plan sponsors.
Why Plan Sponsors Trust Prime Capital Retirement
At Prime Capital Retirement, we’ve built our solutions with the plan sponsor in mind. Our Advisor Managed Account platform is designed to deliver value, improve outcomes, and help you meet your fiduciary responsibilities with confidence.
By offering flexible, participant-centered options like Hybrid QDIA models, we empower your workforce with the guidance they need today—while helping you prepare for the challenges of tomorrow.
📞 Contact our Team today to schedule a consultation and learn how we can optimize your retirement plan.
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