Franklin Templeton Partners with Vestwell to Deliver Advisor Managed Account Offering in a Modern Recordkeeping Construct

Issued by: Franklin Templeton

Date: Jan. 6, 2021

Thousands of financial advisors can now leverage Franklin Templeton’s Goals Optimization Engine (GOE) to provide personalized advice for their retirement plan clients

NEW YORK & SAN MATEO, Calif. -- Franklin Templeton has partnered with digital recordkeeping platform Vestwell to build an advisor managed account experience that will reset the bar on how advisors engage with clients. The new offering combines Franklin Templeton’s proprietary Goals Optimization Engine (GOE™) methodology with Vestwell’s modern recordkeeping infrastructure to create an entirely digital, open-architecture and cost-effective managed account solution. The offering will live natively in Vestwell’s platform, with the ability to automatically enroll participants into a personalized investment strategy.

To date, managed accounts have been somewhat commoditized, simply added on top of existing offerings and therefore failing to provide the experience or cost-effectiveness investors deserve. With a clear market need to revolutionize the space, Vestwell and Franklin Templeton set out to build a managed account offering that is customizable, affordable, and built on a modern fintech infrastructure that benefits all users. By architecting it directly into Vestwell’s platform, Vestwell can capture data that provides participants a more personalized investment experience at each stage of their retirement journey. With a completely open-architecture fund universe and a dynamic qualified default investment alternative (QDIA) capability, advisors can craft their own unique investment programs to provide fiduciary advice while leveraging a modern fintech platform to effectively scale.

“We believe every U.S. worker and household has the right to experience financial well-being during each life phase. Enabling plan advisors to deliver goals-based, personalized, cost-effective advice to Americans in the workplace is our focus. We want to equip advisors and investors with innovative tools and technology to achieve that goal at scale,” says Yaqub Ahmed, Head of US Retirement and Insurance at Franklin Templeton. “We’re thrilled to be working with Vestwell to deliver a managed account offering that helps advisors more effectively engage during all stages of a participant’s savings journey.”

The managed account solution allows plan sponsors to rethink their default option by choosing a dynamic investment model for each employee, rather than a traditional single target-date series. What makes a dynamic QDIA unique is that participants can be defaulted into a target-date series early in their savings journey, before being moved into a more active model as they approach, or reach, retirement. As a result, participants with more complex financial needs can get the personalized advice they need when they need it. And because of the technology efficiency, it can cost a fraction of the price of the typical managed account option.

The offering is currently in late-stage development, with an expected rollout in the first half of 2021. At that time, advisors can leverage Vestwell’s unbundled, open-architected, configurable platform to deliver their own white-labeled 401(k) with an integrated advisor managed account solution.

“We recognize the important role customized advice plays in the retirement plan ecosystem and are excited to be working with Franklin Templeton on a native managed account offering,” says Aaron Schumm, Founder & CEO of Vestwell. “Whether a plan has $500 thousand or $500 million under management, participants deserve access to a quality, personalized investment plan. With a native advisor managed account offering powered by Franklin Templeton’s Goals Optimization Engine (GOE), we can deliver on making great plans more equitable and accessible.”

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