In Practice October 4, 2011

BofA Rebrands Institutional Consulting Group

Bank of America Merrill Lynch is rebranding its Institutional Consulting Group to become Global Institutional Consulting (GIC).

 

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BofA selected Tom McAuliffe to be Managing Director and Head of Global Institutional.  In this role, he is responsible for leading business strategy and execution, improving risk management, and ensuring the development and delivery of institutional investment solutions to pension plans, foundations, endowments, and other institutional clients. 

Prior to joining BofA Merrill Lynch in April 2011, McAuliffe served as Director of Graystone Consulting, Morgan Stanley Smith Barney’s investment consulting group, serving institutional investors and high-net-worth clients. He was responsible for day-to-day business management, including support for financial advisers providing investment advisory and fiduciary services to institutional clients (see “McAuliffe to Join BofA Merrill Lynch Retirement Services”).  He holds a B.S. in business administration from Northeastern University. 

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In addition, a team of institutionally-focused advisers has recently joined the bank from Convergent Wealth Advisors. The team is led by George Dunn, Peter Dunne, and Bruce Wall, and manages more than $2.7 billion in assets. 

BofA recently announced a reorganization affecting the retirement division (see “BofA Names Global Wealth & Retirement Solutions Leadership Team“). 

The Markets October 3, 2011

Casey Quirk Predicts Target-Date Retirement Fund Growth

Target-date retirement funds (TDRFs) will represent nearly half of defined contribution assets by 2020, according to Casey, Quick & Associates.   
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In 2010, when total DC assets in the U.S. were about $4.4 trillion, assets in TDRFs accounted for approximately 12.5% of the total, or $550 billion. By 2020, when total DC assets are expected to reach $7.7 trillion in the U.S., TDRFs will contain approximately $3.7 trillion, or 48% of the total.  

The forecast also predicts low-cost passive funds, along with innovative, customized active accounts, will be the fastest growing strategies adopted by investors, squeezing out the currently dominant mutual fund. 

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By 2020, assets invested in passive strategies and innovative active portfolios will capture an increasing share of the overall target-date market by 2020, approximately 74%, versus 52% in 2010, according to Casey Quirk. Some innovations Casey Quirk expects will capture market share within target-date structures this decade are tactical asset allocation, hedge fund-like strategies, mixing active and passive and proprietary and non-proprietary strategies, and retirement income. 

“As target date retirement funds mature, the landscape will favor innovators providing strategies common in the defined benefit world, and low cost passive providers,” said Casey Quirk Partner, David Bauer. “There is tremendous opportunity but managers must thoroughly examine the market complexities before jumping in.” 

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