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The 401(k) industry is changing. U.S. retirement assets total more than $24.7t with $706b in target-date funds (TDF). The problem with TDF is they were designed to be one size fits all and are not reflective of an individuals' financial profile. Today startups, such as our portfolio company NextCapital, are creating automated personalized portfolio management products that are better aligned with an investor's needs.
Now there is a new offering by NextCapital, a leading personalized planning and portfolio management service. NextCapital seeks to disrupt the retirement target-date fund industry by providing automated, personalized retirement advisory services to 401(k) participants -- at a cost not much more than target-date funds. They are expected to partner with several major advice providers in 2015. If you see their service arrive inside your 401(k) plan, take advantage of it. Competition is increasing the breadth of the advice offered to employees and cutting the costs. So, if you're one of the millions of Americans who have seen their savings grow over the years in retirement plans, don't despair over finding sophisticated, personalized advice on how to invest. Advice is on its way, and just in time.
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