Custom target-date funds (TDFs) continue to rise in popularity within defined contribution (DC) plans, but their seemingly complex process often keep advisors at bay. We believe that semi-custom TDFs, which leverage recordkeeper technology and administrative capabilities, may be the most viable approach to support customization.

We expect that custom models will be the new “norm” when prescribing target-date funds. Fiduciary regulations only continue to fuel this growth. Early adopters of custom and semi-custom models may gain competitive advantages over their peers. It’s not too early to start learning about semi-custom TDFs and the recordkeeper technologies that support customization.