Capital Group and Morningstar Partner on New Target-Date Fund Service

Powered by Morningstar Investment Management, the personalized service is available through recordkeepers that currently have Morningstar’s Retirement Manager available on their platform.

By DJ Shaw

Capital Group, home of American Funds, and the Workplace Solutions group within Morningstar Investment Management LLC have announced a new target-date service, Target Date Plus, with allocation advice tailored to a retirement saver’s specific needs and objectives.

The service, which employers can use as a qualified default investment alternative, blends the American Funds Target Date Retirement Series with Morningstar Investment Management’s experience delivering online investment advice through its user interfaces and network of integrated recordkeepers. The service is available through recordkeepers that currently have Morningstar’s Retirement Manager available on their platform, as well as those who are working toward enabling the service.

“Capital Group is excited for our highly rated target-date series to be leveraged to create a more personalized target-date service for investors saving for retirement,” says Brendan Mahoney, head of institutional retirement strategic growth, Capital Group. “Target Date Plus will enable retirement plans to deliver the personalized asset allocation that participants, plan sponsors and advisers are increasingly seeking, and importantly with administrative ease.”

Target Date Plus offers additional personalization by taking into account an individual’s age, salary, assets, savings rate and company match rate. Through its data network and integrations, Morningstar Investment Management obtains the necessary data points from recordkeepers to furnish and build out a personalized asset allocation and fund-level portfolio for each investor. That network also enables the service to return the investment recommendation to the recordkeeper to process and implement. Morningstar Investment Management can also inform the individual if and when they may benefit from allocating part of their savings to a guaranteed income annuity.

Morningstar Investment Management has designed a user interface for the service based on its learnings from serving 1.7 million managed account users to enable investors to interact with the service and modify the required data points.

“There is growing demand from retirement savers for investment strategies that better reflect their goals and aspirations,” says Brock Johnson, president of global retirement and workplace solutions at Morningstar Investment Management. “Using our strong network of data integrations with recordkeepers, user experiences and advice engines, we can power a new generation of personalized advice services that we believe can position retirement savers for better outcomes.”

«