Firm combines its identical, underlying target date asset
allocation methodology with full personalization to help drive
better retirement outcomes
BALTIMORE, Sept. 10,
2024 /PRNewswire/ -- T. Rowe Price, a global investment management firm
and a leader in retirement, continues the evolution of its target
date offering with the launch of Personalized Retirement
Manager (PRM), a service that uses personal data to create a unique
asset allocation tailored to an individual's specific savings
goals, preferences, and financial situation to help drive better
retirement outcomes. The fully personalized glide path continues to
adjust throughout a participant's retirement savings journey.
PRM can be selected as the Qualified Default Investment
Alternative (QDIA) for participants and uses personal information
available through 401(k) recordkeeping data, such as account
balance, contribution rate, and income. Participants can then
choose to add additional information—retirement goals, a spouse or
partner's assets, household assets outside the plan, and other
relevant factors—to further refine their asset
allocation. Participants have the flexibility to engage as
little or as much as they like; and the more they engage, the more
personalized their experience will be.
The service is proprietary to the firm and was designed by the
same professionals behind T. Rowe
Price's target date solutions, using identical underlying
strategies, allowing clients to add personalization within a
familiar investment framework and with comparable pricing. PRM is
already being used as a QDIA by several T. Rowe Price recordkeeping clients for
participants nearing retirement. The firm also intends to evolve
the platform to incorporate retirement income advice in the
future.
"With advances in technology, leveraging personal data to build
customized asset allocation is the future of target date
solutions," said Wyatt Lee, head of
Target Date Strategies at T. Rowe
Price, whose team manages $464
billion in target date portfolios as of July 31, 2024. "Personalized Retirement
Manager is a significant addition to our target date offering
because it is the first proprietary service of its kind. From the
underlying analytical engine to the portfolio construction and
investment building blocks, we built PRM based on the same research
and asset allocation methodology as our Morningstar Gold Rated
target date strategies. As a leader in the retirement industry, we
consistently strive to be at the forefront of retirement innovation
to offer choice and flexibility to help fuel better retirement
outcomes. Saving for retirement no longer has to be a choice
between target date solutions or personalization—it can be
both."
T. Rowe Price's latest white
paper further analyzes the impact of personalization and the
growing desire for it among plan sponsors. Key findings from the
paper include:
- Target Date products are ubiquitous in the retirement
savings landscape. According to T. Rowe
Price's annual 401(k) benchmarking report, 98% of the firm's
defined contribution recordkeeping clients offered them in 2023.
PRM allows plan sponsors the opportunity to continue offering
target date solutions and incorporate personalization as an
additional and complementary lever to improve retirement
outcomes.
- There is a growing interest in personalization from plan
sponsors. A recent T. Rowe Price
survey found that 14% of Defined Contribution (DC) plan
sponsors currently offer dynamic QDIA solutions that transition
participants from a traditional target date investment to a more
personalized strategy as they near retirement. Another 51% are
either actively considering or interested in exploring dynamic
QDIAs.
- Implementing in-plan personalization gives plan sponsors the
ability to serve a more diverse set of plan participant
journeys. T. Rowe Price's
analysis of the 2022 Federal Reserve's Survey of Consumer Finances
found that retirement savings disparities grow over time among
those who are currently participating in a DC plan. This disparity
is most evident when nearing retirement age. This finding
supports the use of a dynamic QDIA structure to facilitate the
introduction of personalization at a time when it is likely to have
the greatest impact on an individual's optimal outcomes.
"We observe growing demand for personalized solutions in the
industry," said Jessica Sclafani,
global retirement strategist at T. Rowe
Price and author of the white paper. "While target date
solutions and personalization typically exist separately,
Personalized Retirement Manager combines the two, offering T.
Rowe Price's trusted target date
methodology alongside the power of personalization. Our goal is to
help participants feel more confident that their investments are
aligned to their unique circumstances and long-term goals."
ABOUT T. ROWE PRICE
Founded in 1937, T. Rowe Price
(NASDAQ – GS: TROW) helps individuals and institutions around the
world achieve their long-term investment goals. As a large global
asset management company known for investment excellence,
retirement leadership, and independent proprietary research, the
firm is built on a culture of integrity that puts client interests
first. Clients rely on the award-winning firm for its retirement
expertise and active management of equity, fixed income,
alternatives, and multi-asset investment capabilities. T.
Rowe Price serves millions of
clients globally and manages US $1.59
trillion in assets under management as of July 31, 2024. About two-thirds of the assets
under management are retirement-related. News and other updates can
be found on Facebook,
Instagram, LinkedIn, X, YouTube,
and troweprice.com/newsroom.
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SOURCE T. Rowe Price Group
