NAPF annual conference – US ‘shifting from retail to institutional’ – Alliance Bernstein

Davies told delegates at the NAPF annual conference that employers are encouraging staff away from self-selection of funds towards target-based funds more akin to institutional offerings that they believe are more suitable for them. Rather than using off-the-shelf solutions from insurers, employers are increasingly requesting bespoke funds that more accurately reflect the demographic of their employers.
David Norgrove, chairman of the NAPF, pointed out that this trend was in the opposite direction to that in Australia, where employees are taking increasing control of their investments with the help of individual financial advice.
Davies said: “We see it as active investors versus accidental investors. For the majority who do not take an interest in their investments we are seeing movement into target-based funds. Employers are using auto-enrolment to achieve this switch and by the end of this year we estimate 70 per cent of employees will have been moved into this sort of fund.”