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An increasing percentage of consultants (65%) believe that tactical asset allocation is a critical to somewhat important component of glide path management. Only about a third (35%) of firms said that tactical asset allocation is not important. The majority of consultants (78%) believe that investing in Treasury Inflation-Protected Securities (TIPS) is the best risk mitigation approach within asset allocation strategies. Nearly two-thirds of consultants (64%) recommend reducing exposure to assets with highly uncertain outcomes. Almost two-thirds (65%) of consultants feel that current glide paths are somewhat to highly appropriate, whereas over one-third (35%) believe that current glide paths are somewhat to highly inappropriate (i.e., too aggressive). Over three-quarters (78%) of consultants believe that the allocation to risk assets (e.g., equities) for those at retirement age (e.g., 65) should not exceed 40%. Nearly one-third of consultants (32%) believe that the glide path should reach its lowest risk allocation (e.g., equities) between the ages of 71 and 75. Just over a quarter (26%) of consultants believe the lowest risk should be reached earlier, between ages 66 and 70. Notably, 16% of consultants cited other factors, such as demographics and retirement age, as driving factors. There is general consensus among consultants when it comes to loss tolerance for participants at different ages. Almost all consultants cited a loss tolerance of more than 30% at age 25, up to 30% at age 35, up to 20% at age 45, up to 10% at age 55, and between 0% and 5% at the age of 65.
An increasing percentage of consultants (65%) believe that tactical asset allocation is a critical to somewhat important component of glide path management. Only about a third (35%) of firms said that tactical asset allocation is not important.
The majority of consultants (78%) believe that investing in Treasury Inflation-Protected Securities (TIPS) is the best risk mitigation approach within asset allocation strategies. Nearly two-thirds of consultants (64%) recommend reducing exposure to assets with highly uncertain outcomes.
Almost two-thirds (65%) of consultants feel that current glide paths are somewhat to highly appropriate, whereas over one-third (35%) believe that current glide paths are somewhat to highly inappropriate (i.e., too aggressive).
Over three-quarters (78%) of consultants believe that the allocation to risk assets (e.g., equities) for those at retirement age (e.g., 65) should not exceed 40%. Nearly one-third of consultants (32%) believe that the glide path should reach its lowest risk allocation (e.g., equities) between the ages of 71 and 75. Just over a quarter (26%) of consultants believe the lowest risk should be reached earlier, between ages 66 and 70. Notably, 16% of consultants cited other factors, such as demographics and retirement age, as driving factors.
There is general consensus among consultants when it comes to loss tolerance for participants at different ages. Almost all consultants cited a loss tolerance of more than 30% at age 25, up to 30% at age 35, up to 20% at age 45, up to 10% at age 55, and between 0% and 5% at the age of 65.