401(k) Specialist Issue 2 - 2016 - 13

401(k) NEWS YOU CAN USE
Fidelity 401(k) Sales Hit $35 billion for 2015;
Continues World Domination
FIDELITY INVESTMENTS, the Boston-based investment behemoth bent on world
domination, recently announced that new defined contribution retirement plan sales
totaled $35 billion over the first half of 2015, plus $21 billion in commitments for 2016.
The company said sales for the first six months of 2015 included plans of all sizes,
ranging from large corporations to tax-exempt employers, and emerging companies
that often leverage advisors in their selection process. In total, plans sold in 2015 represent
nearly 800 employers with 700,000 employees.
" Our singular focus on delivering an outstanding customer experience has created
new business opportunities for Fidelity, especially in the smaller end of the market
where we won more than $8 billion in sales already this year, " Jim MacDonald, president
of workplace investing for Fidelity, said in a statement.
The firm added that it works closely with financial advisors whose " insights help guide
employers in their provider choice. " As a result, the company claims, Airbnb, NerdWallet,
eSilicon and Prysm, emerging companies in Silicon Valley, chose Fidelity. Fidelity
also won business from tax-exempt health care institutions Allegiance Health,
based in Jackson, Michigan and UnityPoint Health of West Des Moines.
ONLINE
EXTRA
Employees Value " Do-It-For-Me "
Approach to 401(k)s
WE CAN'T SAY WE'RE SURPRISED.
Assets invested in " guided solutions " (model portfolios and target-date funds combined)
have spiked from a little over 17 percent in 2011 to more than 26 percent in 2014. It's one finding
shared by retirement plan giant Ascensus with retirement plan advisors at its Plan On! Conference,
held recenty in Colorado Springs, Colorado.
The company cited Morningstar's year-end data, which notes 80 percent of employees automatically
enrolled in a managed account continued to use managed accounts after two years.
Further, 86 percent of employees invested in managed accounts were properly diversified based
on their age and risk tolerance.
Ascensus also identified the following trends:
Employer matches are becoming more customary. Fifty-five percent of employers funded a
match in 2014, a jump from 52 percent who provided a match in 2013.
Automatic features continue to drive plan participation. By the end of 2014, 18 percent of plans
utilized automatic enrollment, a three percentage point jump from 2013. Additionally, automatic
enrollment has a striking impact on participation rates. Plans in which employees are automatically
enrolled have participation rates 14 percentage points higher than those for plans without
automatic enrollment.
Technology plays an important role in the participant experience. Technological advances and
more widespread access to digital features have created a new user experience for employees.
Currently, 85 percent of new enrollees sign up online, signaling a clear shift to digital.
ISSUE 2 2015 | 401kSpecialistmag.com 13

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401(k) Specialist Issue 2 - 2016

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