DC Managed Advice

Navigating the changing landscape

The Shift Towards Personalization

The defined contribution business is in the midst of a massive shift, although not every financial advisor and plan sponsor fully realizes it yet.

Franklin Templeton is pleased to provide a range of solutions to help financial advisors navigate this changing landscape and deliver solutions to plan sponsors that help plan participants reach their goals.

Individual Advice
Technology-enabled personalization is allowing participants to receive truly individualized advice rather than merely going along for the ride on an age-based glide path.

Enabled by Advances in Technology
New technology (in the form of artificial intelligence, machine learning, and big data processing) can consume and consider more details about the finances and goals of participants. Consequently, the advice delivered to the participant can be based on a clearer, more holistic picture of the investor’s financial situation.

Personalization
This shift toward personalization should help all players in the industry move toward what really matters: better outcomes for investors.

Goals Optimization Engine

Personalization Is Enabled by Our Goals Optimization Engine (GOE®)

GOE logo

At the heart of our managed advice programs, you’ll find our proprietary Goals Optimization Engine (GOE®). GOE is based on academic research that won the 2018 Harry Markowitz Award from the Journal of Investment Management. It comprises a powerful algorithm, machine learning, and dynamic programming … which together allow an individual portfolio to be managed for each individual participant in a defined contribution plan.

GOE differs from traditional risk-based portfolio management and the traditional glide paths found in many products offered in DC plans. GOE takes a more active approach, periodically evaluating the participant’s likelihood of reaching his or her stated goal and adjusting the asset allocation accordingly, striving to maximize the probability of success for each participant.

For more on GOE and how it works, download “The Methodology Behind Franklin Templeton’s Goals Optimization Engine.”

The Methodology Behind Franklin Templeton’s Goals Optimization Engine.

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Personal Retirement PathTM … Offered in Partnership with Next Capital

Personal Retirement Path is Franklin Templeton’s first QDIA-eligible managed advice platform. The solution, powered by NextCapital, launched in early 2021.

Personal Retirement Path logo

Personal Retirement Path features GOE as the investment engine and is available via the Next Capital interface. Ascensus is the first record keeper to go live with Personal Retirement Path.

For more on Personal Retirement Path, download our brochure for advisors and plan sponsors.

Personal Retirement Path Brochure

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Advisor Managed Account Offering with Vestwell

We’re also pleased to announce that Vestwell (a cloud-based record keeper) has selected GOE as the investment technology for its native advisor managed advice solution.

Vestwell logo

Vestwell’s GOE solution helps advisors engage participants at scale while leveraging a modern fintech platform to deliver results. The offering is open architecture, meaning advisors who embrace investment selection as part of their value proposition can continue to craft their own unique programs. Additionally, the QDIA-capability facilitates greater adoption and can ultimately lead to better outcomes.

By architecting GOE directly into Vestwell’s platform, participants enjoy a cohesive experience between their retirement plan management and personalized advice. The native integration enables Vestwell to capture data that provides participants a more custom investment experience at each stage of their retirement journey.

 

 

Next Steps for Interested Advisors

For more information on how we can help you make personalized managed advice a part of your practice, please contact your Franklin Templeton Defined Contribution Specialist directly. Or call our Retirement Sales team at 800-530-2432.

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