[August 23, 2016]

What's Not to Love? Employees Value Managed Accounts, but Education Could Broaden Adoption

In an effort to understand why companies and employees value workplace managed accounts - as well as the barriers to adoption - Fidelity Investments conducted research¹ to unpack the sentiments of employers and their workers. The response: to know managed accounts is to love them.

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What's Not to Love? Employees Value Managed Accounts, but Education Could Broaden Adoption (From: Business Wire)

• 48% of participants enrolled in managed accounts said that the ongoing monitoring of their investments was one of the most valuable things about the offering.
• 44% said that the annual review was essential. Of these,
• 38% said that ongoing management was beneficial, as well.

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.

• 39% of those who don't use a managed account say they lack understanding of what is being offered or the benefit.
• 25% 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:

• 54% say the offering would be relevant to their needs.
• 52% said that they would find the service useful.

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

• Engage, engage, engage! Proactively engage employees on the benefits. Provide information to help them understand how managed accounts provide an investing approach based on their personal situation. Work with your workplace managed account provider to offer awaeness campaigns to educate, create dialog and encourage them to seek help.

• Again, again, again! Be sure to remind employees about the value of your managed account offering by providing education periodically and in multiple forms. As they say, timing is everything and frequent communication will increase the likelihood that your employees will engage.
• Get them early! The earlier the employees get on track with both saving and appropriate investing, the likelier they are to build the wealth and savings they will need throughout their retirement.

"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 plan² ."

For more information or resources on educating employees on the value of managed accounts, please contact a Fidelity representative.

About Fidelity Investments

Fidelity's goal is to make financial expertise broadly accessible and effective in helping people live the lives they want. With assets under administration of $5.4 trillion, including managed assets of $2.1 trillion as of June 30, 2016, we focus on meeting the unique needs of a diverse set of customers: helping more than 25 million people invest their own life savings, nearly 20,000 businesses manage employee benefit programs, as well as providing nearly 10,000 advisory firms with investment and technology solutions to invest their own clients' money. Privately held for nearly 70 years, Fidelity employs 45,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit https://www.fidelity.com/about.

¹ Including Fidelity-sponsored research with GfK (polled 212 corporate benefits managers and 802 401(k) participants in Q1 2015), S Radoff Associates and Plannerzone (series of 4 focus groups were held-two in Dallas on February 17 and two in Chicago on February 23, 2015) and S. Radoff Associates (online survey with 468 respondents from March 26-April 3, 2015).

² Fidelity internal Customer Knowledge and Strategic Information reporting for 2015, covering 860 plans with a reach of more than 1.9 million participants. Results observed 30 days after first touch:
- 1.5% (29K) participants made a deferral increase, going from 7.5% to 11.3%.
- 2.0% (39K) made an asset allocation change.
- 0.7% (14K) called the guidance phone number.
- 2.2% (43K) started a tool interaction.
Results vary by client and there is no guarantee of those results for other clients who follow the same approach.

† Source (News - Alert): Based on eligible clients in our Large/Select market segments with an active PAS-W managed account service setup on or before December 31, 2015. 277 out of 361 of these clients kicked off a PAS-W awareness communications program within the January 2015-December 2015 timeframe.

Guidance provided by Fidelity is educational in nature, is not individualized, and is not intended to serve as the primary or sole basis for your investment or tax-planning decisions.

Fidelity® Portfolio Advisory Service at Work is a service of Strategic Advisers, Inc., a registered investment adviser and a Fidelity Investments company. This service provides discretionary money management for a fee.

Fidelity Brokerage Services LLC, Member NYSE, SIPC
900 Salem Street, Smithfield, RI 02917

Fidelity Investments Institutional Services Company, Inc.,
500 Salem Street, Smithfield, RI 02917

National Financial Services LLC, Member NYSE, SIPC,
200 Seaport Boulevard, Boston, MA 02110

771175.1.0
© 2016 FMR LLC. All rights reserved.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160823005729/en/

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