Diversification Is Key

More and more studies are confirming that on-going monitoring, management and diversification of any retirement account is critical to ensuring a comfortable future.
In fact, while there are no guarantees against loss, studies have proven that
90% of a portfolio’s total return is determined by proper asset allocation over
time.1

Studies also confirm that despite the best efforts of plan sponsors to educate participants, the majority of today’s retirement plan participants are confused about their investment options, and lack the time, interest or knowledge to properly manage their own accounts.Therefore, they are not monitoring, diversifying and managing their accounts on a regular basis to achieve the maximum plan outcomes over time.2

Managed Accounts Keep Reluctant Investors On Track

By following an automated and best practices approach to investing that is quarterly monitored, rebalanced and reallocated over time to reflect individual life changes and market adjustments, AAG’s Managed Account service enables more reluctant investors to increase their opportunity for improved outcomes.

  • Early studies indicate that an automated and managed approach to investing compensates for the current lack of investor involvement and investment diversification that is currently limiting retirement savings outcomes. The Managed Account service enables plan participants to have their accounts professionally managed and automatically rebalanced on a quarterly basis in accordance with the modern portfolio asset allocation theory, investment practices and procedures.
  • When the managed account approach is combined with an automatic increase in deferred savings—usually timed during salary increases—studies indicate greater retirement savings with less overall attrition3

Managed Account Investors Receive:

  • A personalized investment portfolio that reflects their Plan options, current account balance, savings rate, personal Social Security estimate and your unique retirement time frame, life stages and overall financial picture
  • Automatic monitoring, rebalancing and reallocation every quarter by AAG in response to respond to market performance
  • Ongoing updates through a Welcome Kit that outlines the new plan strategy, Quarterly Statements, and an Annual Managed Account update
  • Convenient access via print, Web or telephone
  • Access to Series 65 Licensed AAG Adviser Representatives, who can answer any questions and assist with enrollment and participant account updates
  • The opportunity to cancel participation in the Managed Account service at
    any time.

Benefits for Plan Participants:

  1. Ensures greater and proper investment diversification and therefore increased potential for portfolio total return over time.1
  2. Helps participants save more money with the managed savings feature and the ability to increase savings potential through a proper investment diversification approach.3
  3. Helps those participants who lack the skill, interest or time to managing their own investments feel more confident about their future.

Benefits for Plan Sponsors:

  1. Increases plan value for participants
  2. Provides reluctant investors with an objective and diversified portfolio
  3. Diversifies risk

1 Sources: Financial Analyst Journal, May/June 1991. Study results confirmed by Ibbotson Associates, April 1999). Participants are not investment experts…and don’t want to be.

2 Investment Insights, January 2004. Study results confirmed by Sarah Holden and Jack VanDerhei, “401K Plan Asset Allocation, Account Balances and Loan Activity in 2002” Employee Benefit Research Institute, Washington, D.C., (September 2003).

3 Source: "Managed Accounts: Are They The Answer", The Wagner Law Group. Study results as reported in The 401(k) Wire, March, 2003.


Advised Assets Group, LLC © 2005