Investment Product and Service Launches for the Week

Dimensional Fund Advisors launches TDF solution; Morningstar acquires Total Rebalance Expert; Morgan Stanley adds CreditSights to online adviser portal; and AB reveals holistic annuity fiduciary service. 

Dimensional Fund Advisors Launches Target-Date Solution

Dimensional Fund Advisors, a global investment management firm, announced the launch of the Dimensional Target Date Retirement Income Funds, described as “a next generation solution developed to help manage uncertainty around consumption in retirement.”

The series of 13 funds are “carefully designed to address market, interest rate, and inflation risks leading up to and throughout retirement.”

David Booth, Dimensional chairman and co-CEO, says “defining and managing the right risks” are both critical steps when determining a retirement plan participants’ asset allocation. “A good target-date solution should balance the tradeoffs between growth investments and an appropriate risk-hedging asset,” he adds.

With these goals in mind, Booth notes the new Dimensional TDFs “are designed to manage relevant risks, in particular, interest rate and inflation risks, so investors are less exposed to the effects of random market forces. This may reduce uncertainty about how much consumption their investments will support in retirement, and enable plan sponsors, consultants, and financial advisers to use meaningful information about expected retirement consumption to help investors plan for a more successful retirement.”

The Dimensional Target Date Retirement Income Funds use asset-allocation strategies to invest in “income-growth investments,” mainly global equities and fixed income, as well as complementary “income risk management investments.” The portfolios aim to address risks with a hedging strategy based on established liability-driven investing (LDI) theory and an inflation-protected fixed income portfolio.

NEXT: Morningstar Scoops Up Total Rebalance Expert 

Morningstar, Inc. announced this week that it has entered into a definitive agreement to acquire Total Rebalance Expert (tRx), described as “an automated, tax-efficient investment portfolio rebalancing platform for financial advisers.”

Morningstar will acquire the platform from FNA, LLC and expects to complete the transaction in November 2015. Terms were not disclosed.

Sheryl Rowling, CEO of FNA and principal of independent advisory firm Rowling & Associates, created tRx in 2008, “when she couldn't find an affordable, tax-efficient, easy-to-use rebalancing system for her own practice.” Currently more than 500 financial advisers from 175 firms rely on tRx to rebalance more than $20 billion in client assets, according to Morningstar.

The tRx platform streamlines the rebalancing process for advisers and automates the complexities involved in rebalancing and managing portfolios. Advisers can use the software to more easily minimize taxes, harvest losses, and rebalance at the account or household level. They can also use the tool to show clients, in dollars and cents, how much they saved in taxes by working with the adviser.

In June 2015, Morningstar announced it was integrating the tRx rebalancing capabilities into Morningstar Office, the company's practice and portfolio management system.

“As we began to work together, both firms liked what we saw and realized that it made sense for Morningstar to acquire tRx,” Rowling said. “Morningstar has the resources to take tRx to the next level by combining it with the company's proprietary research and data.”

Rowling will continue to run her advisor practice and work for Morningstar on a part-time basis, the firm says. Morningstar plans to incorporate the tRx capability into its adviser offerings and will also continue to offer it as a standalone platform.

NEXT: Morgan Stanley Adds CreditSights to Online Portal 

Morgan Stanley Wealth Management announced that it has added CreditSights, an independent provider of global fixed-income research, to its online portal of research and strategy content for its financial advisers.

Financial advisers working with Morgan Stanley “will now have access to and can provide to clients, upon request, fundamental corporate bond research on over 900 investment grade and high yield companies across the globe, as well as corporate credit-focused market strategy and sector analysis.”

The reporting is supported by more than 70 analysts in the U.S., Europe and Asia, according to the firms, specializing in the integration of fundamental and quantitative disciplines to provide reliable credit research to institutional investors and corporations.

Kevin Lynyak, head of trading for Morgan Stanley Wealth Management Capital Markets, says the addition of CreditSights will help the firm’s financial adviser network and their clients to make “more informed decisions about corporate credit investments suited to pursuing their investment objectives within their risk profile.”

For more information about CreditSights visit or call 212-340-3840.

NEXT: AB Reveals Holistic Annuity Fiduciary Service 

AB, formerly known as AllianceBernstein, has launched a new fiduciary service that “will assume fiduciary responsibility for annuity selection in connection with its Lifetime Income Strategy service.”

As the party responsible for annuity selection, AB will perform these duties as an investment manager under Section 3(38) of the Employee Retirement Income Security Act (ERISA), the firm notes. AB's new service is “intended to alleviate the burden and risk associated with a plan fiduciary's responsibility as it relates to the inclusion of guaranteed income options so that plan sponsors can feel more confident in offering lifetime income solutions to employees.”

Richard Davies, senior managing director for defined contribution at AB, says it is very clear that policymakers and regulators want to encourage plan sponsor adoption of guaranteed income solutions, so it makes sense to roll out this new service now. “With our new fiduciary service, a plan sponsor can delegate responsibility to AB for its insurance product selection,” he adds. “This should make plan sponsors feel more comfortable in offering employees guaranteed income in retirement.”

AB says its Lifetime Income Strategy is a natural extension of its customized target-date expertise and provides participants with a personalized asset-allocation strategy that helps build critical retirement savings, followed by guaranteed income for life. Guaranteed income through the Lifetime Income Strategy is provided by multiple insurers through a technology platform established by AB to operate as an insurer marketplace. This marketplace is a core element of AB's fiduciary service as it helps to ensure that guaranteed income is fairly priced, the firm says.

AB's multi-insurer approach is also meant to help address sponsor concerns around sustainability, as insurers participating in the marketplace can change over time without reducing the ability to generate guaranteed income for current and future plan participants.  

To learn more about AB's defined contribution solutions, go to