Folio Institutional is initially offering the MMX program as a free service for all registered advisers and broker/dealers who use its platform. Advisers wishing to have their models displayed can do so for free as well; however, they are required to have a minimum level of assets on the Folio Institutional platform, with those funds invested in one or more of their models.
Negotiations of licensing fees are conducted directly between the sellers and buyers of the investment strategies. Once a model is licensed for use, trades are executed via the Folio Institutional platform, which handles all back-office transactions between the licensor and licensee.
“Effective today, every adviser on our platform has access to an enhanced universe of innovative portfolio models created and managed by other advisers and institutions,” said Folio Institutional President Greg Vigrass. “MMX allows model managers to increase the reach and visibility of their portfolio strategies, while creating a new revenue stream for them. Meanwhile, licensees can efficiently access third party expertise to offer their clients a broader range of managed investments.”
Interested advisers can learn more about MMX by contacting Folio Institutional at 888-485-3456.
By using this site you agree to our network wide Privacy Policy.
DC Market Predicted to Reach $5.5 Trillion by 2015
Defined contribution money managers may have an unlikely benefactor
to thank for helping to deliver an estimated $1.9 trillion in
contributions over the next five years: the recent economic downturn.
A new report suggests that because of the economic downturn, more people than ever before are aware of the need to be prepared for retirement, and when coupled with the growing popularity of auto-plan features, consultant McKinsey & Company expects the DC market to reach $5.5
trillion in assets by 2015.
“The stakes in the DC market have never been higher.” writes consultant McKinsey & Company in its report, Winning in the Defined Contribution Market of 2015: New Realities Reshape the Competitive Landscape.
“The financial crisis and ensuing recession have focused the attention
of sponsors, participants and the government on the crucial role DC
plans play in ensuring retirement security for millions of Americans.
This scrutiny will lead to regulatory changes that will alter the
competitive landscape in both predicable and unpredictable ways.”
Among the forces McKinsey predicts will have the most impact on the DC landscape by 2015 are:
The introduction of auto-IRAs could have a material impact
on small plan providers, increasing participation by 40 million and
funneling over $100 billion into DC over the next five years.
Increasing auto default and escalation thresholds could
direct an additional $90 billion into DC by 2015 and dramatically
improve Americans’ retirement readiness.
Proposals around greater fee disclosure could induce a shift
to flat per-participant recordkeeping fees and away from
revenue-sharing models with asset managers, making recordkeeper
economics more stable but capping their upside.
Decisions regarding who can provide advice – and how they
can provide it – could shift the balance of power between recordkeepers,
asset managers and advisers to those with access to participants.
A decision on whether to make retirement income solutions
QDIAs or to require one in every plan could provide an entry point for
manufacturers with annuity capabilities and dramatically shift a plan’s
typical allocation. This would also greatly reduce the IRA opportunity,
dramatically changing the economics for integrated recordkeepers.
“The adoption of any of these regulatory measures could
significantly impact who wins and who loses in DC, just as the PPA
(Pension Protection Act) changed competitive dynamics by providing
safe-harbor protection for the adoption of target-date or target-risk
solutions as QDIAs,” McKinsey comments.
(Cont...)
Better Plan Sponsors
McKinsey also says in its report Winning in the Defined Contribution Market of 2015: New Realities Reshape the Competitive Landscape that
plan sponsors are getting better at what they do, with an increasing
amount of help from advisers, because of heightened fiduciary and
cost concerns and the increased complexity of plan rules and product
design.
Plans will continue to streamline and simplify fund
lineups, driven largely by the advisers’ guidance. “The trend toward
simplification will force asset managers to specialize more, deliver a
clear value proposition around a narrower band of asset classes and
solutions, and raise the bar for investment performance,” the consultant
writes.
The streamlining of investment options, coupled with the
shift to open architecture in target-date funds, will create significant
growth opportunities for IODC managers, McKinsey also predicts, with
IODC market share increasing from 43% to 50%
“Employers are
professionalizing their decisionmaking, involving finance, treasury and
procurement functions at the expense of human resources. These trends
are leading to more sophisticated plan design, rigorous decisionmaking,
in-depth due diligence, and increasingly stringent and formalized
standards for providers in both asset management and recordkeeping,” the
consultant asserts.
(Cont...)
Other Trends
Other trends over the next five years, according to McKinsey, will include:
The share of passive assets in DC plans will double by 2015 to 25%.
By
2015, nearly 70% of assets will be held by individuals at or within
five years of their target date for retirement. This shift will create
significant growth opportunities, particularly for fixed-income managers
and income-oriented equity managers. “Active equity managers, after two
decades of benefiting from DC growth, will be on the short end of this
trillion dollar shift,” McKinsey says.
Segmentation in DC is
also being shaped by stark contrasts in flows. Small and mid-size plans
and K-12, for example, will experience inflows, driven by increased (and
automatic) enrollment and workforces; mega plans by contrast will
suffer $200 billion in outflows, owing to an older workforce.
Differences
between plan designs are growing narrower – particularly in the extent
403(b) plans resemble 401(k)s. This is being driven by regulatory
changes and a move in the 403(b) world to a single recordkeeper.
The
lines between size segments within the 401(k) world are breaking down,
as sponsors of all sizes increasingly demand similar solutions such as
open architecture and participant advice.
McKinsey &
Company conducted interviews with more than 80 plan sponsors, industry
experts, RIAs and consultants, and included its own modeling and
proprietary analysis, in preparing the report. The full report is available here.