Managed accounts and target-date funds are the newest incarnations in the defined contribution space. The two types of accounts are in huge demand because they help to take the guesswork out of investments.

At the end of 2012, 36 percent of Vanguard's 3.4 million participants were invested in a professionally managed option. Five years ago, that figure was 17 percent.

The percentage has doubled in five years because more plan sponsors are offering these options in their plans and there has been an increase in retirement plans offering automatic enrollment. That means new hires and individuals who qualify to participate in the employer-sponsored plan are being defaulted into a target date fund or other professionally managed account.

In plans that adopt auto enrollment, 91 percent default to a TDF, 6 percent default to a risk-based balance fund and the rest default to a fixed-income option, said Jean Young, senior research analyst at Vanguard's Center for Retirement Research.

In 2012, 73 percent of participants entering a Vanguard plan used a professionally managed option and "we predict that will grow to 80 percent in five years," Young said.

At Fidelity Investments, the number of plan participants choosing a managed account option rose by 57 percent over last year, said Sangeeta Moorjani, senior vice president of professional services.  Assets in those accounts grew by 50 percent.

The main reasons for that growth? Plan sponsors are seeking better solutions for participants. "Helping participants manage their portfolios, but also making sure they have the right fiduciary protection," she said.

Plan sponsors realize that "participants left to their own devices are not making the right decisions. What they are seeking in this world of increasing complexity and market volatility is someone to actively manage their portfolio to their unique specifications," Moorjani added.

Target-date funds are a great solution for plan participants who want to set it and forget it, she said. Managed accounts, on the other hand, take into account an employee's financial situation, risk tolerance, complexity of their life and personal situation.

"We see plan sponsors looking at both TDFs and managed accounts as part of their lineup. One offers simplicity and the other customization," Moorjani said.

Recent retirement data has shown that well over half of plan participants have not properly allocated their investments and more than 80 percent don't rebalance their retirement accounts in a given year. Managed accounts are targeting these people, to get them to take the extra step to break through their inertia, she said.

Last summer, The Principal Financial Group looked at 2.4 million defined contribution plan participant accounts to see how the do-it-yourself investors fared next to TDF investors. What it found was that people who managed their own accounts were less diversified by asset class and number of investment options, rarely used automatic rebalancing to meet their investment goals and, at younger ages, frequently had much less exposure to equities.

"It's clear that left to their own devices, participants often don't fully understand the importance of diversification," said Jeff Tyler, portfolio manager, Principal LifeTime Funds.

"We believe a minimum of five asset classes should be used with a broad selection of investment options to provide adequate diversification for the typical retirement plan participant. The research shows that many do-it-myself investors aren't meeting that mark. While asset allocation doesn't assure a profit, target date portfolios seek to accomplish this goal by providing access to multiple underlying investment options and investment managers within a single investment option."

Managed accounts do better than accounts that aren't actively managed because they are actively managed and rebalanced quarterly by professional advisors, Moorjani said. "This absolutely sets people on the right path."

Financial professionals keep up-to-date on market changes and can plan and make changes – or not — for participants quickly based on that information.

"Do-it-yourselfers take more risk because they react to swings in the market; they take a lot more risk in their portfolio than is necessary," she said.