Enhancing the participant and plan sponsor experiences

April 25, 2018

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Doing what's right for clients has always been Vanguard's first priority. With this goal in mind, we continue to make major investments in our full-service recordkeeping business—adding new services and enhancing current benefits for participants and plan sponsors. These upgrades are the result of building robust internal programs and exploring beneficial external relationships.

The wide-ranging investments touch our business in varied ways, from developing technological advancements to incorporating participant data into valuable analytics to securing partnerships with industry-leading experts. The common thread is they're all made with clients' needs at the forefront.

Commitment to participant services

  • An institutional-tailored brokerage platform: For experienced participants serviced through Vanguard's direct recordkeeping platform who choose to build and manage their own retirement portfolios, Vanguard is teaming with TD Ameritrade to provide an outstanding brokerage platform and award-winning app1. Participants have access to comprehensive trading and planning tools, a broad menu of securities, and extensive research and analysis on the new platform. Plan sponsors may also elect for their participants using a brokerage window that have also partnered with a financial advisor to grant access to their portfolios through Veo®—TD Ameritrade's dedicated account management and trading platform for advisors.
  • Exemplary platform for nonqualified plan (NQP) clients: Vanguard is enhancing the NQP client experience through our new relationship with Newport Group, a leading independent retirement services firm. The partnership is built on an integrated service model that maintains the Vanguard client service our participants expect and deserve while providing them with additional administrative support to ensure an exceptional NQP experience. The relationship will enrich Vanguard's NQP service with benefits that include:
    • Single sign-on for integrated online access to NQP and qualified plan accounts.
    • State-of-the-art NQP systems and technology.
    • Flexible administration and streamlined processing.
    • Bucket accounting to customize deferral plans based on account type.
    • Comprehensive online experience for both sponsors and participants.
  • Making it easier to plan for retirement: The Vanguard Retirement Readiness Tool was introduced to help participants know if they're on track to retire on time and view an estimate of their monthly retirement income. The technology aggregates current plan savings, Social Security, and self-reported outside assets, and combines the data with assumptions on future contributions to deliver an assessment of a participant's retirement readiness. If participants are not on track, the tool provides them with a nudge, which is a specific action they can take, usually through a few simple clicks, to get back on track.
  • A simple, personalized web experience: At the start of 2018, Vanguard successfully completed a multiyear technology project to update its participant website, designed to simplify saving for retirement and improve participant outcomes. Using the Vanguard Retirement Readiness Tool and a user-friendly design, the homepage is driving more participant actions than before, and it helps answer some of the most important questions participants have:
    • What do I have?
    • What does that mean?
    • What should I do next?

Taking the plan sponsor and consultant experience to new heights

  • Powerful analytics to better understand participant behaviors: Using the robust data in the Retirement Readiness Tool for participants, Vanguard can work with plan sponsors to assess if their participants are on the right track to retire. We produce a score for the plan using data components such as retirement savings, Social Security benefits, and estimated rollover balances from prior employers. We can customize the assessment and look at different segments of the participant population, in addition to identifying plan design changes that could help participants achieve their retirement goals.
  • An improved consultant experience: As part of Vanguard’s dedication to improving the client experience, Vanguard is piloting a project with the goal of enhancing the consultant experience by making it easier to do business with Vanguard. The project includes a secure, dedicated web portal that provides dynamic tools and thought leadership to help consultants manage their book of business at Vanguard. Several firms are participating in the pilot project, and more will be added this year. The full rollout to all consultants is currently scheduled for next year.
  • The power of How America Saves at one's fingertips: Plan sponsors have more data available to them than ever before. The recently launched Retirement Plan Comparison Tool, which pulls data from How America Saves, allows plan sponsors and consultants to compare their retirement plans with all other Vanguard-recordkept plans and industries we serve. With the new tool, plan sponsors and consultants can:
    • Interact with and manipulate industry and plan data to create insightful comparisons and make more effective plan decisions.
    • View the retirement savings behavior of 4-million-plus Vanguard-recordkept plan participants to track historical trends and benchmark employee benefits.
    • Build, analyze, and share customized reports.

Vanguard has always been committed to doing what we believe is best for clients and their retirement goals. As long as investors will continue to benefit from enhanced services, we'll continue to invest in resources that improve the client experience.

1 Number one Smartphone App for TD Ameritrade Mobile Trader (Stockbrokers.com 2018 Annual Review).

Notes:

  • All investing is subject to risk, including the possible loss of the money you invest.
  • The Retirement Readiness Tool uses return forecasts from the VCMM to project the growth of the participant's balance between the current date and retirement. Based on the participant's current investment mix, the participant's future investment growth is simulated thousands of times by the VCMM to produce his or her retirement income estimate. In 85% of those simulations, the participant's investments achieve returns that provide at least the level of income shown in the estimate.

    IMPORTANT: The projections or other information generated by the Vanguard Capital Markets Model regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. VCMM results will vary with each use and over time.

    The VCMM projections are based on a statistical analysis of historical data. Future returns may behave differently from the historical patterns captured in the VCMM. More important, the VCMM may be underestimating extreme negative scenarios unobserved in the historical period on which the model estimation is based.

    The Vanguard Capital Markets Models® is a proprietary financial simulation tool developed and maintained by Vanguard's primary investment research and advice teams. The model forecasts distributions of future returns for a wide array of broad asset classes. Those asset classes include U.S. and international equity markets, several maturities of the U.S. Treasury and corporate fixed income markets, international fixed income markets, U.S. money markets, commodities, and certain alternative investment strategies. The theoretical and empirical foundation for the Vanguard Capital Markets Model is that the returns of various asset classes reflect the compensation investors require for bearing different types of systematic risk (beta). At the core of the model are estimates of the dynamic statistical relationship between risk factors and asset returns, obtained from statistical analysis based on available monthly financial and economic data from as early as 1960. Using a system of estimated equations, the model then applies a Monte Carlo simulation method to project the estimated interrelationships among risk factors and asset classes as well as uncertainty and randomness over time. The model generates a large set of simulated outcomes for each asset class over several time horizons. Forecasts are obtained by computing measures of central tendency in these simulations. Results produced by the tool will vary with each use and over time.
  • TD Ameritrade and Vanguard are separate and unaffiliated firms, and are not responsible for each other's services or policies.
  • Brokerage services provided by TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc., and the Toronto-Dominion Bank. Used with permission.