Stadion Money Management, a Georgia-based RIA definedcontribution specialist, is rolling out a managed account programbased on what the firm calls “defensively-oriented” investmentstrategy.

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The accounts will leverage exchange-traded funds, or ETFs, whichhave seen explosive growth in the retail investment market in thepast year, but have not been widely adopted in the 401(k) market.

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The new program will target smaller plans, according to acompany release.

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“Participants in the nation’s smallest 401(k) plans have beenoverlooked by the retirement industry because there hasn’t been anefficient way to deliver customized advice down to the planparticipant level in micro and small plans,” said Tim McCabe,senior vice president at Stadion.

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McCabe noted that 90 percent of retirement plans have assetsless than $5 million.

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“There’s an awful lot of Americans saving for retirement withoutadvice, direction, or perhaps even access to the most appropriateinvestment vehicles,” he added.

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According to the company’s website, the accounts’ mostaggressive growth strategy, for participants under the age of 49,has a 50-percent allocation to equities.

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That’s a much more modest allocation than many target-datestrategies. Fidelity, for instance, has participants in the sameage group invested up to 90 percent in equities.

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As a part of its managed account service, Stadion can increaseequity allocations up to 90 percent in low market riskenvironments.

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As with other managed accounts, Stadion is marketinga more personalized approach than participants can get investing intarget-date funds as a qualified default investment.

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“Target-date funds have not leveraged their leadership largelybecause they fail to take into consideration that plan participantsare individuals, and these individuals retire one at a time,” saidMcCabe.

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Through the platform’s interface, participants can inputinformation such as assets outside of plan accounts, and spousaland family information, to craft a more personalized savingsplan.

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“In the large plan market, customization has become the normboth at the sponsors and participant level,” said Jud Doherty,Stadion’s CEO.

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While Stadion also has a lineup of proprietary target-date andtarget-risk funds, which are also built on ETFs, the company is wagering thattechnology innovations can be leveraged to bring competitivelypriced managed account options to participants in small plans.

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“It’s unrealistic to assume one glide path works for everyone,”he added. “We believe our glide paths, built using low-cost ETFswith a defensive bias, are the next generation of investing in thesmall market.”

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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.