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Personalized Investing
Personalized Investing is Sentinel's version of a Managed Account Program (MAP). By combining the data aggregation and user interface of iJoin with the investment expertise and personalization technology of LeafHouse Financial, Personalized Investing helps select a QDIA that helps meet the needs of plan participants. This service is an opt-in solution for plan participants who want to have customization while remaining in control of the investments offered in the retirement plan.
If you are like many retirement plan providers looking for options to add to their plan, it’s always a good idea to look closer at individual program features to determine which may be the best fit for plan participants.
How does this help my clients?
Participants can benefit in three key ways from a managed portfolio customized to their unique lifestyle and retirement needs:
- Users are likely to increase their contribution rates
- Employees' portfolio management can be automated
- Reallocation occurs as plan participants’ personal situation changes
Pricing
The cost is 11 basis points, annualized, which will be assessed against your clients’ account monthly. The 11 basis points are calculated using their account balance on the last day of the month and are prorated for the number of days they are in the managed account.
The table below compares common plan default options and the benefits of each:
| MANAGED ACCOUNT PROGRAM Personalized investing strategies | MODEL PORTFOLIOS Preset age- or risk-based fund allocations | TARGET DATE FUNDS Age-based retirement investments | |
|---|---|---|---|
| Qualified Default Investment Alternative (QDIA) | Yes | Yes | Yes |
| Participant-level fiduciary protection | Yes | No | No |
| A dynamic strategy for each individual | Yes | No | No |
| Interactive experience | Yes | No | No |
Historically, performance has been used as a benchmark for evaluating a MAP, or the equivalent our Personalized Investing Strategy, but this approach may not adequately capture the overall value. The questions below can be used to help define the value for your clients and their employees:
| Does your plan offer... | Implications |
|---|---|
| Investment personalization? | Employees approaching retirement may need more personalized investment support. |
| Savings rate advice? | Users are likely to increase their contribution rates. |
| Ability to automate portfolio management? | Set it and forget it is not a recipe for a successful retirement. |
| Recommendations that consider more than one account? | Ability to incorporate multiple accounts when creating a comprehensive strategy. |
| Access to income solutions? | Participants often seek income options. |
| Automatic reallocation based on changes to an individual’s circumstances? | Participants benefit from reallocation that occurs as their personal situation changes, which is facilitated by the deep technology of the service. |
Which portfolio is right for my clients' employees?
Personalized Investing FAQs
Personalized Investing is a professionally managed, fully digital investment strategy that makes investing easier for your clients' employees. As the name implies, Personalized Investing takes key financial and demographic data points from both retirement plan attributes and information they share to create a custom investment strategy designed to help meet their retirement goals.
Personalized Investing can be the right solution for anyone. But for those who prefer a hands-on approach yet feel uncertain about managing the complexities of retirement investing, a Personalized Investing Strategy offers an easy to way to obtain professional management of their retirement account.
- It’s Easy. For individuals who prefer a hands-off approach to investing, a managed account provides convenience. The investor doesn't have to actively monitor the market or make investment decisions; instead, the manager handles those tasks.
- Customized to them. Managed accounts can often be customized to meet specific investment objectives, such as income generation and capital appreciation. This level of customization may be appealing to investors with unique financial goals.
- Accounts are managed by an expert. As a Professional Manager, the strategy’s advisor has a legal responsibility to participants in making investment decisions in their best interest.
- Ongoing Investment Monitoring. Personalized Investing provides continuous monitoring of the performance of the portfolio and makes adjustments as needed.
It’s easy! Follow the simple steps outlined here to set up a Personalized Investing strategy.
- No. Personalized Investing requires the entire account to utilize this strategy.
- With Personalized Investing, current balances and future contributions will move to the managed account.
- Yes. Participants have full control of their account. If someone enrolls in a Personalized Investing strategy, they can get out whenever they want.
- They can (re)enter a Personalized Investing strategy at their discretion as well.
- If they come in or out of a Personalized Investing strategy, their monthly fee will be pro-rated to the number of days in that month they were in the Personalized Investing strategy.
There is no guarantee provided by any party that participation in Sentinel Managed Accounts will result in a profit or that the related account will outperform a self-managed portfolio invested without assistance. Sentinel’s Managed Account Program is powered by LeafHouse and iJoin. There is no guarantee provided by any party that participation in any of the LeafHouse Investment Services will result in a profit.
Take the Next Step.
Contact our Advisor Channel Consulting Team to see just how Sentinel can help you, your clients and their participants.
