An email has been sent to your address with instructions for changing your password.
There is no user registered with this email.
Sign Up
To create a free account, please fill out the form below.
Thank you for signing up!
A confirmation email has been sent to your email address. Please check your email and follow the instructions in the message to complete the registration process. If you do not receive the email, please check your spam folder or contact us for assistance.
Welcome to our platform!
Oops!
Something went wrong while trying to create your new account. Please try again and if the problem persist, Email Us to receive support.
Principal® Meeting Rising Demand for Personalized Retirement Investment Strategies With New Hybrid QDIA
Rhea-AI Impact
(Low)
Rhea-AI Sentiment
(Neutral)
Tags
Rhea-AI Summary
Principal Financial Group has introduced the Principal® Intelligent QDIA, a hybrid qualified default investment alternative, aimed at enhancing personalized investment strategies for employer-sponsored retirement plans. This solution combines target date strategies and managed account services to cater to participants' evolving needs. Younger participants will default into target date funds, while individuals aged 45 and above will shift to a managed account for customized strategies. Research indicates that personalized advice significantly boosts investment confidence. With a growing trend of hybrid QDIAs, 86% of plan sponsors project target date funds with managed accounts will dominate by 2030.
Positive
Launch of Principal® Intelligent QDIA offers personalized investment solutions for retirement plans.
Hybrid QDIA combines target date funds and managed account services to cater to diverse participant needs.
Increased trend towards hybrid QDIAs with a 67% rise in adoption from 2020 to 2021.
Research shows participant confidence in investing jumps from 35% to 65% with professional advice.
Negative
None.
DES MOINES, Iowa--(BUSINESS WIRE)--
Principal Financial Group® has launched a new, hybrid qualified default investment alternative (QDIA) – Principal® Intelligent QDIA – to help meet the growing demand for personalized investment strategies within employer-sponsored retirement savings plans. Plan sponsors that choose Principal® Intelligent QDIA will provide participants with a path to greater personalization as their careers and lives evolve since the hybrid QDIA offers both target date strategies as well as a managed account service in one default option.
Unless a different investment election is made during enrollment, participants younger than the plan’s set transition age (e.g. 45 years old) will be defaulted into a target date fund. Once participants reach the plan’s set transition age, they will automatically move to a managed account service that will enable tailored investment strategies that consider more than age by using additional factors such as contribution levels, account balance, and social security benefit. Participants can further refine the strategy by inputting additional financial and goal-based information such as other retirement accounts, desired retirement age, planned retirement expenses, and lifestyle in retirement.
“We know from research and our direct conversations with customers that personalized investment advice has become a need for retirement savers,” said Brett Fisher, head of investment product strategy for Retirement and Income Solutions at Principal®. “Principal® Intelligent QDIA can help participants feel more confident in their financial futures by getting them started on a savings path for retirement before ultimately helping them manage the wealth they’ve accumulated.”
Hybrid QDIAs have become more attractive over the past two years. The number of plan sponsors adopting them as the default investment option increased 67% year-over-year from 2020 to 20211. Going into 2023, 86% of plan sponsors and 76% of financial professionals Principal surveyed agreed the most common default option by 2030 will likely be a target date fund with a managed account service2.
Participants also acknowledge the value of advice, indicating their investing confidence increases from 35% to 65% when receiving professional help.3
“Our ultimate goal is to give participants a holistic view of their financial outlooks so we can help them determine what may be necessary to reach their retirement goals,” Fisher said. “The more personalized and tailored those experiences can be, the better outcomes we believe can be created.”
About Principal Financial Group®
Principal Financial Group® (Nasdaq: PFG) is a global financial company with 19,000 employees4 passionate about improving the wealth and well-being of people and businesses. In business for more than 140 years, we’re helping more than 62 million customers5 plan, protect, invest, and retire, while working to support the communities where we do business, and build a diverse, inclusive workforce. Principal® is proud to be recognized as one of the 2023 World’s Most Ethical Companies® by Ethisphere6, a member of the Bloomberg Gender Equality Index, and a “Best Place to Work in Money Management7.” Learn more about Principal and our commitment to building a better future at principal.com.
Asset allocation and diversification does not ensure a profit or protect against a loss.
Insurance products issued by Principal National Life Insurance Co (except in NY) and Principal Life Insurance Company®. Plan administrative services offered by Principal Life. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Securities offered through Principal Securities, Inc., member SIPC and/or independent broker/-dealers. Principal Global Investors leads global asset management. Referenced companies are members of the Principal Financial Group®, Des Moines, Iowa 50392.
________________
1U.S. Retirement Markets 2021, Cerulli and Associates, December 2021 2 Principal Future of Retirement Survey, November 2022 3Principal Retirement Security Survey – Investments, July 2022 4 As of December 31, 2022 5 As of December 31, 2022 6Ethisphere, 2023
7 Pensions & Investments, 2022
What is Principal's new investment strategy launched recently?
Principal has launched the Principal® Intelligent QDIA, a hybrid qualified default investment alternative for retirement savings plans.
How does Principal® Intelligent QDIA enhance retirement planning for participants?
The Principal® Intelligent QDIA provides personalized investment strategies by combining target date funds with managed account services tailored to participant's financial goals.
What percentage of plan sponsors predict target date funds will be the most common default option by 2030?
86% of plan sponsors surveyed by Principal believe that target date funds with managed account services will likely be the most common default option by 2030.
What was the increase in adoption of hybrid QDIAs from 2020 to 2021?
The adoption of hybrid QDIAs increased by 67% year-over-year from 2020 to 2021.
