Voya evolves suite of advice and guidance solutions with launch of new dual QDIA
- Voya Financial has introduced a new dual Qualified Default Investment Alternative (QDIA) to provide participants with more personalized retirement investments.
- The new QDIA aims to address the needs of younger accumulators and near-retirees, with a 28% increase in total assets in Voya's managed account solutions in 2023 compared to the previous year.
- The QDIA also provides ERISA 3(21) and 3(38) fiduciary support, with Voya Retirement Advisors (VRA) serving as the registered investment advisor.
- Voya research indicates that over 56% of working Americans plan to utilize workplace advice services in 2024.
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Insights
The introduction of Voya Financial's new dual Qualified Default Investment Alternative (QDIA) represents a strategic move to cater to the evolving needs of retirement plan participants. The shift from a traditional target-date fund (TDF) to a managed account program as participants approach retirement age is indicative of a broader industry trend towards personalized investment strategies. This initiative could potentially increase Voya's competitive edge in the retirement plan market by addressing the demand for customized retirement solutions.
From a financial perspective, the 28% increase in assets under management in Voya's managed account solutions in 2023 suggests a growing acceptance and potential profitability of such offerings. Furthermore, the company's focus on expanding its suite of advice and guidance solutions, including the myVoyage platform, may enhance customer retention and attract new clients looking for comprehensive financial planning tools.
It is also noteworthy that the dual QDIA provides fiduciary support under ERISA 3(21) and 3(38), which could mitigate legal risks for plan sponsors and bolster Voya's value proposition by emphasizing compliance and risk management.
The transition from TDFs to managed accounts for pre-retirees aligns with the need for more tailored retirement planning as individuals near retirement. Managed accounts offer a level of customization that TDFs cannot, potentially leading to better retirement outcomes for participants. The personalized investment advice, retirement income planning and payout strategies that come with managed accounts can be particularly beneficial for participants who may have more complex financial situations as they near retirement.
Moreover, the integrated participant experience facilitated by Voya Retirement Advisors (VRA) could improve participant engagement and satisfaction. The ability to access personalized advice and guidance when and how participants want it is likely to be a key factor in the success of Voya's managed account programs. The reported 10% improvement in participant enrollment in 2023, attributed to targeted enrollment campaigns, underscores the importance of effective communication and education in driving adoption of these programs.
The data from Voya Financial's Consumer Insights & Research survey indicates that a significant portion of the workforce is likely to utilize workplace advice services in 2024. This suggests a market opportunity for Voya and similar firms to capitalize on. The growing interest in managed accounts could be driven by a broader industry shift towards financial wellness and personalized financial services. As more employees seek to understand their overall savings picture and prepare for retirement, demand for such services is expected to rise.
Additionally, Voya's introduction of a new advisory services program and the myVoyage platform aligns with the consumer demand for digital and integrated financial services. These initiatives could lead to increased market share and customer loyalty if they successfully address the needs of today's tech-savvy consumers who value convenience and personalization in financial planning.
Solution comes at a time when new Voya research finds
The new dual QDIA solution includes a default investment starting as a target-date fund (TDF), which could be a single fund, a TDF series or a set of asset allocation funds. When participants reach a certain age (generally around age 50), they are automatically transitioned to any of the managed account programs supported by Voya, including the firm’s Advisor Managed Account solutions and additional proprietary offerings. Managed accounts, which are professionally managed investment services, use a plan’s core investment menu to provide pre-retirees with individual investment advice, retirement income planning and payout strategies, and tactics that are more personalized to an individual’s needs.
“At Voya, we find that individuals nearing retirement are in need of a more holistic approach that not only supports their unique retirement goals and more-complex investment needs but also ensures that they are prepared to generate a sustainable retirement income stream,” said Andre Robinson, SVP, Retail Wealth Management and Advisory Solutions at Voya Financial. “Helping our clients gain access to managed accounts can help with these needs. At the same time, we are seeing growing interest from retirement plan participants — with total assets in Voya’s managed account solutions up
Adopting a dual QDIA and shifting pre-retiree participants from TDFs to a managed account service can offer advantages to both plan sponsors and participants. While employers can take advantage of the QDIA safe harbor regulations, which include managed accounts, they can at the same time provide their employees with a higher-touch and personalized approach to retirement planning through the managed account offering. Voya’s dual QDIA also provides ERISA 3(21) and 3(38) fiduciary support, with Voya Retirement Advisors (VRA) serving as the registered investment advisor. Employees will also be provided with an integrated participant experience, which — along with the power of VRA registered investment advisors and access to advice and guidance solutions — can help participants get the support they need when, where and how they want to access it. The new solution will also be available to intermediaries that currently work with Voya to support their Advisor Managed Account programs.
Providing pre-retirees with guidance, advice, planning tools and one-on-one assistance well before their retirement age can help drive better outcomes — and most individuals agree. According to new Voya research, more than half (
“We continue to offer managed account programs to all of our plan sponsor clients, with adoption and interest continuing to grow as we expand our solution set,” said Jason White, director, Advisory Services at Voya Financial. “We also know that education is critical to success when it comes to participant engagement. In 2023, we found participant enrollment improved
Voya offers a comprehensive suite of in-plan and out-of-plan advice and guidance solutions designed to help employees achieve their financial goals. Most recently, the firm introduced a new advisory services program providing participants in Voya-administered retirement plans with a broader scope of access to advice services. Along with that, Voya has remained focused on providing products and programs that support financial professionals in helping their clients reach their future goals, which include Voya’s advisor managed accounts advisory program and the launch of myVoyage, a personalized financial-guidance and connected workplace-benefits digital platform.
As an industry leader focused on the delivery of benefits, savings and investment solutions to and through the workplace, Voya is committed to delivering on its mission to make a secure financial future possible for all — one person, one family, one institution at a time.
1. & 3. Voya internal data reflecting time period Jan. 1–Dec. 31, 2023, |
2. Voya Financial Consumer Insights & Research survey conducted Oct. 2–3, 2023, on the Ipsos eNation omnibus online platform among 1,005 adults aged 18+ in the |
About Voya Financial®
Voya Financial, Inc. (NYSE: VOYA), is a leading health, wealth and investment company with approximately 9,000 employees who are focused on achieving Voya’s aspirational vision: Clearing your path to financial confidence and a more fulfilling life. Through products, solutions and technologies, Voya helps its 15.2 million individual, workplace and institutional clients become well planned, well invested and well protected. Benefitfocus, a Voya company and a leading benefits administration provider, extends the reach of Voya’s workplace benefits and savings offerings by engaging directly with over 12 million employees in the
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Media Contact:
Laura Maulucci
Voya Financial
(508) 353-6913
Laura.Maulucci@voya.com
Source: Voya Financial, Inc.
FAQ
What is the new dual Qualified Default Investment Alternative (QDIA) launched by Voya Financial, Inc.?
What percentage of working Americans plan to utilize workplace advice services in 2024?
What fiduciary support does the new QDIA provide?
What increase was observed in total assets in Voya's managed account solutions in 2023 compared to the previous year?
