Personalized retirement advice and managed accountsWho uses them and how does advice affect behavior?

Personalized retirement advice and managed accountsWho uses them and how does advice affect behavior?

Personalized retirement advice and managed accounts

Who uses them and how does advice affect behavior?

Agnew

Julie

Agnew, Julie

Author

Author

text

working paper

Chestnut Hill, Mass. Center for Retirement Research at Boston College20062006monographic

Chestnut Hill, Mass.

Chestnut Hill, Mass.

Center for Retirement Research at Boston College

2006

2006

monographic

Englisheng

English

eng

electronicapplication/pdfborn digital

electronic

application/pdf

born digital

This paper investigates two methods for improving participants asset allocations in their 401(k) plans: personalized online advice and managed account services. This paper uses a unique new dataset of individual-level administrative data from one 401(k) plan and recommendation data from an advice provider. Preliminary results suggest that online advice and the managed account service appeal to different populations. Managed accounts tend to be attractive to individuals across most demographic groups, while the online advice appeals more to higher salaried, full-time workers. In addition, individuals who show a predisposition to seek advice are more likely to use one of the methods than to do nothing. Finally, although a causal relationship cannot be determined, trading activity is higher for those using the online advice system compared to those who do nothing. Future research will investigate in more detail how portfolio allocations and trading are influenced by use of the two systems.

Julie Agnew.

CRR WP2006-9

CRR WP2006-9

CRR WP

2006-9

http://crr.bc.edu/images/stories/Working_Papers/wp_2006-9.pdf

MChBEnglisheng

MChB

Englisheng

English

eng