Products September 27, 2016

Betterment Reveals Tax-Coordinated Portfolios

The new product automates the process of optimizing asset location to boost an investor's cumulative after-tax returns.
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Automated investment advice provider Betterment has launched a new adviser tool that helps investors consider how to best allocate savings/investments across taxable, tax-deferred and tax-exempt accounts.

Choosing wisely how one allocates assets among these account types can significantly improve the after-tax value of savings, Betterment explains. To this end, the Tax-Coordinated Portfolio product helps investors manage multiple accounts as a single portfolio, “placing less tax-efficient investments into more favorably taxed accounts.”

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Betterment says its own research shows that in one generalized scenario, saving wisely in all three types of accounts improved the end-value of savings by as much as 15% over 30 years. (Also see, “Taxes Often a Surprise Expense in Retirement.”)

“Asset location is the closest thing there is to a free lunch in wealth creation,” states Boris Khentov, vice president of operations and a tax attorney at Betterment. “Customers saving for retirement in more than one type of account should be using it to increase their after-tax returns. However, doing it properly is a complex, mathematically rigorous, and continuous process.”

The goal for Betterment’s Tax-Coordinated Portfolio is to “automate this sophisticated strategy every step of the way, helping our customers make the most of their investments.”

More information on Betterment and the firm’s entrance into the employer-sponsored retirement plans marketplace is available here.  

Products September 27, 2016

T. Rowe Price Offers Sales Process Automation

The firm says the Essential Choice sales tool rationalizes and automates small-plan sales. 
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T. Rowe Price Retirement Plan Services, Inc. announced the launch of the Essential Choice sales tool, described by the firm as a Web-based application that allows retirement plan advisers to create pricing proposals for the T. Rowe Price Essential Choice retirement plan solution in real time.

Essential Choice is a prepackaged retirement plan solution suited for small businesses with up to $5 million in assets. T. Rowe Price says the product package includes support from an experienced plan services team, life stage participant education on preparing for retirement readiness, flexible investment options, and fixed pricing.

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The new mobile-enabled tool will help advisers sell Essential Choice to small businesses faster and simplifies the sales process for busy plan sponsors looking for straightforward plan features, according to T. Rowe Price.

“We recognize the time advisers spend with a prospective client is valuable and are committed to helping them deliver retirement plan solutions effectively,” explains Diana Awed, head of product and marketing for T. Rowe Price Retirement Plan Services, Inc.

According to Awed, with less time spent on the administrative work involved in creating proposals, advisers have “more capacity to focus their attention on growing their business and finding the right solutions for plan sponsors and ultimately their plan participants.”

Key functionalities of the Essential Choice tool include automated proposal generation that allows advisers to generate custom proposals based on simple variable inputs and a fixed pricing model, as well as advanced analytics and reporting capabilities and consolidated conversion reporting.

More information is available from T. Rowe Price here.  

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