HR Technology

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ISG is the bridge between technology and HR.

Enabling your HR services with the right technologies takes a special combination of HR domain knowledge, process expertise and technology savvy. Our experienced team balances the importance of technical architecture and use of emerging technologies with a deep understanding of HR functionality, processes and user expectations.

ISG can help guide you through your digital transformation journey:

  • HR technology roadmap and business case – Leveraging deep, real-world experience, ISG will work with you to ensure your HR technology roadmap and business case optimizes your technology and service delivery and identifies realistic savings and efficiencies that are achievable in the market.
  • HCM SaaS software selection and negotiations – As one of the very few unbiased advisors in the market, ISG’s unparalleled experience, proven market templates and proprietary data assets will help guide you through the entire HR technology lifecycle from RFP development and selection through contract negotiations.
  • System integrator selection and negotiations – ISG’s market knowledge and sourcing contracts database give you confidence in selecting the right partner at the right cost to implement your chosen technology.
  • Experience layer, knowledge base and other employee servicing technologies – ISG’s service delivery expertise helps you better understand your delivery options and create the right end-to-end employee experience.
  • Automation use cases and opportunity identification – ISG’s expertise helps you identify top HR opportunities to automate processes, improve HR efficiency and effectiveness, and realize quick ROI savings.
  • Deployment planning and oversight – ISG will work with you to ensure a successful deployment with readiness planning and ongoing guidance and oversight for your transformation initiative.
  • Designing your HR technology support organization or Application Management Services (AMS) – Whether building or buying ongoing technology support, ISG will help you better understand your delivery options and design the optimal ongoing maintenance organization.

Springboard into digital transformation with Cloud ERP.

Getting the Most Out of Defined Contribution Managed Account Services

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Defined-contribution plan sponsors in the enterprise HR Benefits team play a crucial role in managing the defined-contribution plan. Acting in the best interest of the plan participants is a fiduciary/legal responsibility and includes carefully selecting service providers to fulfill their fiduciary responsibility.

Enterprises that use managed account services – the investment management service that simplifies the investment process and optimizes returns for defined-contribution plan participants – must still make some critical decisions. In particular, plan sponsors sometimes struggle with whether to choose a recordkeeper (i.e., Alight, Fidelity) or a sub-advisor (i.e., Edelman Financial Engines) for managed account services. This provider is responsible for managing some or all the investment decisions in a fund.

The following pros and cons will help plan sponsors evaluate their options.

Pros for Using a Recordkeeper for Managed Account Services

  1. Direct access to data for real-time account balances, fund performance and other participant data
  2. Integrated solutions for a more seamless participant experience and potentially less administrative work for the plan sponsor
  3. Potential cost savings with bundled services for using the recordkeeper’s proprietary product
  4. Unified and streamlined communication with participants

Cons for Using a Recordkeeper

  1. Lack of confidence that the financial advisors providing investment advice have the same level of expertise as a sub-advisor
  2. Potential insufficient resources to offer a financial advisor hub or ill-suited client-to-advisor ratio
  3. Concerns about financial advisors “pushing” proprietary funds if the recordkeeper is not willing to agree to contractual protections

Pros of Using a Sub-Advisor for Managed Account Services

  1. Specialization by a sub-advisor whose primary business is to offer customized investment strategies
  2. Greater independence if sub-advisors do not own insurance companies that get referrals from the job

Cons for Using a Sub-Advisor

  1. Potential higher overall costs
  2. Added complexity for the plan sponsor for having multiple providers

One important item to note, plan sponsors are concerned about biased advice. Both recordkeepers and sub-advisors can promote their own or a related party’s investment options, which is a conflict of interest.

Recently, the managed account landscape has seen a great deal of change due to advancements in technology – including AI, data analytics capabilities and user-friendly platforms. It has also sharpened its focus on participant-paid fees, expanded its range of investment options, undergone regulatory changes relating to investment advice and, more recently, experienced market volatility, which has increased the demand for personalized advice.

It would be beneficial for the plan sponsor to compare the recordkeeper and sub-advisor offerings to the current plan with the following considerations:

  • The plan sponsor’s specific needs
  • Preferences of plan participants
  • Structure and offerings of the managed account provider
  • Regulatory and fiduciary considerations
  • Contractual protections

Defined contribution managed account services can help enterprises and HR teams fulfill their fiduciary responsibilities to offer wise investment choices to their employees and help participants maximize their investment portfolios. Discerning which one is best suited for your organization can make a difference that more closely aligns with the goals of enterprises’ retirement plan. ISG helps companies navigate these offerings and find the right fit. Contact us to find out how we can help.

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About the author

Jenni Cornwall

Jenni Cornwall

Jenni Cornwall is a Consulting Manager in ISG Business Operations – HR Advisory practice and brings over 20 years of experience to the HR and Benefits services and technology industry. Her expertise includes service delivery assessment, benchmarking, business case development, strategy development and service provider evaluation and selection. 

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