Last year, 36% of all participants in 401(k) retirement plans at Vanguard invested their plan assets in a professionally managed investment option, more than doubled from 17% at the end of 2007, according to the Valley Forge, Penn.-based firm.
Vanguard estimates that 55% of all its participants will be entirely invested in a professionally managed investment option by 2017.
According to Vanguard’s How America Saves 2013, an annual report used as a barometer of U.S. retirement planning trends, 27% of all participants in 2012 were invested in a single target-date fund, 6% held a single traditional balanced fund, and 3% used a managed account advisory program.
Furthermore, 14% of participants who were offered an investment advice service through their plan adopted one. “The number of participants completely turning their portfolio construction over to a professional, or obtaining advice from professionals, is an important trend in the potential future financial security of retirees,” stated Jean Young, co-author of the report.
“It represents a shift in responsibility for investment decision-making away from participants—many of whom may be inexperienced investors—to investment and advice programs that have been vetted by employers as part of their fiduciary obligations.”
As of May 31, Vanguard managed more than $2.2 trillion in U.S. mutual fund assets and provides investments to nearly 4,000 defined contribution plans.