Another boon associated with the uptick in professionally managed portfolios: a huge increase in diversification levels. In 2005, just 39% of participants maintained a balanced strategy. By 2021, that number had shot up to 78%.
“If you look back over the past 15 years, there has been a dramatic shift toward more age-appropriate allocations,” said Clark. “That shift is even more pronounced among younger participants, who have greater potential to benefit from the power of compounding,” said Clark.