Products August 11, 2016

Investment Product and Services

Society of Actuaries releases new research about economic scenario generators; and Nuveen announces online alternative investments platform.

 

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Society of Actuaries Releases New Research on Economic Scenario Generators

The Society of Actuaries (SOA) has released a new research paper focusing on economic-scenario generators. Authored by global investment managing firm Conning, the paper offers insight about understanding the future of economies and financial markets, while highlighting the risk elements driving financial variability.

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The paper is designed for various audiences from business practitioners and senior financial leaders to students

“This practical guide provides important perspectives for actuaries and other business professionals in working with economic scenario testing,” says R. Dale Hall, SOA managing director of research. “With the evolving changes on a global scale and the need for realistic models for risk management, it is necessary to have a comprehensive understanding of economic scenarios and the opportunities in working with capital markets.”

The paper analyzes the use of economic-scenario generators in supporting rating agency and regulatory requirements, its business applications in the insurance and pension industries and more.

“Practitioners’ use of robust sets of economic scenarios can provide critical insight into all the integrated moving parts of both the macro-economy and the global capital markets in which companies operate,” says Hal Pedersen, ASA, Ph.D., a director of Risk Solutions for Conning and one of the paper’s lead authors. “This is particularly important when dealing with persistent low or negative interest rate environments and when managing asset and liability risks over long time horizons.”

The full paper can be accessed here.

NEXT: Nuveen Announces Online Alternative Investments Platform

Nuveen Announces Online Alternative Investments Platform

Nuveen, a division of TIAA Global Asset Management, has partnered with technology firm Artivest to to develop a new technology-driven alternatives investment platform to make it easier to access alternative investment solutions. 

The product is geared toward a wide audience including registered investment advisers, private banks, and other financial advisers serving qualified high-net-worth investors. The service provides digital tools, education materials and access to a client service team from Nuveen and Artivest.  

“The launch of this new initiative clearly illustrates our commitment to serving advisers in this space and our desire to help their clients access the broad and deep alternative investment solutions at TIAA Global Asset Management and build out this important component of their portfolios,” says Mike Perry, managing director for Nuveen.

More information can be found here. 

Client Service August 10, 2016

Participants Reveal What Retirement Planning Help They Need

Fewer than half (44%) of participants surveyed by Charles Schwab are confident making 401(k) decisions on their own, but 74% said they would be confident making 401(k) decisions with the help of a financial professional.
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Saving enough for a comfortable retirement is by far the top source of financial stress for 401(k) participants, with 40% citing it as a significant financial stress, according to the Charles Schwab’s 2016 401(k) participant survey.

Paying off credit card debt was cited a significant source of financial stress by 21% of respondents, and paying off student loans was chosen by 13% of respondents overall and 24% of Millennials.

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Fewer than half (43%) of participants know how much they should save for a comfortable retirement. Two-thirds (67%) indicated they know what percentage of their salary they should save in their 401(k)s, yet 49% said it seems impossible to save enough money in their 401(k) to have a comfortable retirement. Fifty-nine percent said their 401(k) is their only or largest source of retirement savings.

Fewer than half (44%) are confident making 401(k) decisions on their own, but 74% said they would be confident making 401(k) decisions with the help of a financial professional. Seventy percent said they would like personalized investment advice for their 401(k), 58% wish there was an easier way to know how to choose investments, and 44% said they don’t feel they know what their best investment options are.

Twenty-nine percent of participants said they increased their 401(k) contributions in the past year because they received a promotion or salary increase and had more money available to save, and 28% did so because they are concerned about having enough money to retire and want to save more. However, 5% decreased their contributions because they needed money for day-to-day living expenses, and 16% said they made no change to their contribution amount because they think they are already saving enough.

NEXT: Obstacles to saving and help wanted

Obstacles to saving for retirement cited by respondents included:

  • Not willing to sacrifice things that add to my quality of life – 32%;
  • Paying for unexpected expense like home repairs – 30%;
  • Saving/paying for children’s education – 29%;
  • Needing enough money to pay basic monthly bills – 24%;
  • Paying off credit card debt – 23%;
  • Having medical bills to pay – 19%; and
  • Still paying off student loans – 17%.

Participants want help with retirement planning and finances. Twenty-six percent said they would like help managing their current expenses so they can save more money for retirement. Participants also want help with calculating how much money they need to save for retirement (46%); determining at what age they can afford to retire (43%); figuring out what their expenses will be in retirement (39%); understanding how to create a monthly paycheck to cover expenses in retirement (30%); and figuring out how to catch up on their retirement savings goals (23%), among other things.

Eighty-five percent said they would use a financial wellness program if it were offered by their employer.

The survey was conducted from June 2 through June 6 among 1,000 401(k) plan participants. Full survey results are available here.

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