DC Managed Advice
Helping American Workers Achieve Their Retirement Goals
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.
Individualized 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.
New 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.
Personalization is enabled by our goals optimization engine
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 probability of success for each participant.
Personal retirement path™ offered in partnership with iJoin
Franklin Templeton’s Personal Retirement Path is a QDIA-eligible managed advice solution, launched with iJoin.
Personal Retirement Path features GOE as the investment engine and is available through the iJoin interface. Recordkeeping is currently handled by Ascensus.
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 managed advice solution.
The GOE solution on the Vestwell platform is open architecture, meaning advisors who embrace investment selection as part of their value proposition can continue to provide that service to clients.
By architecting GOE directly into Vestwell’s platform, Vestwell can capture data that provides participants a more personalized investment experience at each stage of their retirement journey. With a completely open-architecture fund universe and a dynamic qualified default investment alternative (QDIA) capability, advisors can craft their own unique investment programs to provide fiduciary advice while leveraging a modern fintech platform to effectively scale.
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.
Important Information
The academic research supporting GOE® won the 2018 Harry M. Markowitz Award from the Journal of Investment Management and New Frontier Advisors, LLC. This is an annual award honoring Dr. Harry M. Markowitz, a Nobel laureate in economics, for his legacy and to support future research and innovation in practical asset management. Candidates are taken from among papers published in the Journal of Investment Management each year. The winning paper was “A New Approach to Goals-Based Wealth Management,” by Sanjiv R. Das, Daniel Ostrov, Anand Radhakrishnan and Deep Srivastav.
All investments involve risk, including possible loss of principal.
Please see each product's web page for specific details regarding investment objective, risks, performance, and other important information. Review this information carefully before you make any investment decision.
This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice. This material may not be reproduced, distributed or published without prior written permission from Franklin Templeton.
As a financial professional, only you can provide your customers personalized advice and investment recommendations tailored to their specific goals, individual situation, and risk tolerance.
Franklin Templeton does not provide legal or tax advice. Retirement plans are complex, and the federal and state laws or regulations on which they are based vary for each type of plan and are subject to change. Franklin Distributors, LLC (FD, LLC) cannot guarantee that such information is accurate, complete or timely, and disclaims any liability arising out of your use of, or any tax portion taken in reliance on such information.