For many planners with high-net-worth minimums for their clients, target-date funds don’t make sense for a variety of reasons. But in the right circumstances, they can be helpful tools.

“Most of the time, we like to have control over the asset allocation rather than ceding them to a third party,” says Tom Bullitt, who runs Mill Street investment Management, a division of Ballentine Partners, in Waltham, Mass. But for some younger investors, less-sophisticated investors and for use in 529 college funds, they can play an important role, Bullitt said.

Target-date funds originally were created with retirees in mind. As an investor ages, the funds automatically shift savers’ allocations towards more conservative investments, like bonds and fixed income. But they can help investors achieve non-retirement goals as well.

Sandra Field, the founder of Asset Planning Inc. in Cypress, Calif., says she uses them for nascent investors with as low as $20,000 to $30,000 in savings.

“For younger investors who are just getting started, if their savings goes south, they may be turned away from investing in the future,” Field said. “I hate to put them in some aggressive growth fund.” With a target-date fund, the assets are mixed between stocks, bonds and cash and they don’t require the investors to make constant decisions about reallocation.

“It can grow on automatic,” she says, “and give them the feel that they are gaining every year.”

In the right cases, target-date funds can help in a situation where a wealthy patriarch or matriarch is funding the education of all of their grandchildren. In a case, where the money needs to go to a grandchild's parent who is  unsophisticated about money and cannot afford a financial advisor, then the money could be gifted into a target fund in a 529 college account for the grandchild, according to Bullitt.

“We would choose them for certain select circumstances when there are overriding reasons that clients can ill afford to take the risk of things not going right,” Bullitt said, adding that it’s difficult to generalize as to when right circumstances in which they are most helpful. “Everybody’s situation is different. I think the target-date funds work well for specific circumstances when investors have less resources and when their financial flexibility might be stressed.”

Ann Marsh writes for Financial Planning.