Bridging the Retirement Advice Gap: How Plan Sponsors Empower Participants with Managed Accounts

Underneath the well-documented retirement crisis, another plight is unfolding: a scarcity of accessible, quality retirement advice. In defined contribution (DC) plans, participants have full responsibility for their retirement, often without the necessary skills to turn their savings into the retirement they want and deserve. Plan sponsors are in a unique position to bridge this advice gap and provide participants with the services they need to create their retirement strategy.

While the crisis is often framed solely as a participant savings shortfall, this doesn’t capture the many decisions that lead the participant to run out of money. According to researchers at the Morningstar Center for Retirement & Policy Studies, 45% of households are projected to outlive their retirement savings. While the leading reason identified was a lack of access to DC plans, that alone cannot explain the crisis. Notably, 16% of participants who have saved for more than 20 years are still projected to run out of funds—suggesting that the act of saving isn’t always sufficient.

Participants are clamoring for advice on how to improve their retirement strategies—or to outsource them completely. The reality is that many interdependent decisions factor into a person’s retirement wealth: how much to save, where to save it, and how to invest it, as well as when to retire, when to take Social Security, and how much to withdraw during retirement. This demand for help is exemplified by a 2025 Cerulli report on retirement savers in the US that found 70% of respondents view retirement planning as a very valuable advisor service, second only to investment management.

Even though savers recognize the value of working with an advisor, many find the barrier to entry too high. Cerulli found that 63% of DC participants still don’t have an advisor, with the top reasons cited being not feeling like they have enough assets, uncertainty about how to vet an advisor, and a reluctance to pay high fees.

Plan sponsors have an opportunity to help fill this retirement advice gap for their participants by enhancing their employee benefits package with a retirement planning service, like managed accounts. A managed accounts service—like Morningstar Retirement Manager—provides participants with a personalized retirement strategy that supports them from start to finish in their retirement journey.

These personalized retirement strategies demystify the retirement planning experience by helping participants answer knotty questions, including how to sustainably withdraw from their savings. This advice is generated and tailored to the participant using data provided by the recordkeeper (salary, savings rate, location) and the participant themselves (held-away assets, retirement goals, spousal information). Avoiding the pitfalls of point-in-time alternatives, this advice is also dynamic. By taking a continuous approach, managed accounts adapts to participants’ life changes to better keep them on track for retirement.

Harking back to the three primary reasons why individuals opt not to work with a financial advisor, managed accounts can be a more accessible alternative. Unlike the difficulty of finding a trusted advisor, managed accounts is pre-vetted and offered by their plan sponsor. The service is also not gatekept by account balance, so savers with few assets are still able to benefit from the value of its advice. Although by no means a one-to-one equivalent to an advisor, managed accounts can provide a comparable service, at a fraction of the cost, to participants who may otherwise not receive advice.

Gone are the days of the average plan sponsor providing a pension and taking full onus of its participants’ retirements. However, even if the participant is taking on a larger role in their own financial future, that doesn’t mean plan sponsors should completely check themselves out of the equation. A managed accounts service offers an accessible way to address the retirement advice crisis by guiding savers through every step of their retirement journey.