Report : Investment | February 15, 2024

Addressing diverse participant needs through personalization and behavioral coaching

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Participants in defined contribution plans have unique financial circumstances, objectives, and risk preferences when saving for retirement. Providing a path to financial wellness for such a diverse population requires a spectrum of solutions, from the more self-directed approach using target-date funds to the more personalized advice-based approach. 
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Advice is an excellent option for participants with more complex financial situations, a need for personalized guidance, or simply a desire for ongoing behavioral support. Yet our research shows that only 41% of defined contribution (DC) plans offered financial advice to participants in 2022.1

In this paper, the first in our research series on advice and self-directed paths for participants, we focus on two aspects of the benefits of advice: personalization and behavioral coaching.

Offering a range of options as part of a comprehensive retirement income solution can provide participants with the support they need and the level of engagement they prefer on the path to financial well-being and a financially successful retirement.

1 How America Saves 2023. Vanguard, 2023. 

Notes:

  • For more information about Vanguard funds, visit institutional.vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.
  • All investing is subject to risk, including the possible loss of the money you invest.
  • Investments in target-date funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in target-date funds is not guaranteed at any time, including on or after the target date.
  • Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor, or by Vanguard National Trust Company, a federally chartered, limited-purpose trust company.