Impact of Personalization and Engagement on Managed Accounts

This technical report examines the relationship between personalization, engagement, and participant outcomes in managed accounts. The analysis builds upon prior research showing that managed accounts users exhibit higher account balances compared to those utilizing target date funds, risk-adjusted model portfolios, or asset allocation funds. Specifically, it reveals that as personalization becomes more active and as participants engage through dashboards or representatives, account balances increase significantly. The findings indicate that even limited engagement through automatic personalization leads to higher balances, with an 8% increase observed when participants do not engage actively. The strongest results emerge when both personalization and engagement are present, resulting in a 38% increase in balances compared to the comparison group. The report underscores the importance of designing advice offerings that facilitate both automatic personalization and meaningful engagement to enhance participant outcomes, although it notes that the study's observational nature does not establish direct causation between these factors and balance differences.