The new Target Date Compass is designed with expanded investment analytics, a more intuitive design, simplified charts and a tablet-friendly interface. Together, these enhancements make Target Date Compass a powerful resource for the timely, accurate and prudent analysis of TDFs, the firm says.
The tool is powered by data from Morningstar and is used by financial advisers to help plan sponsor clients narrow the growing array of fund choices in the TDF space. The tool collects data from plan sponsors on such criteria as the plan’s overall objectives, risk tolerance, demographics and expected participant behavior. Based on these answers, sponsors are directed to one of four areas on the Target Date Compass “quadrant map,” allowing them to concentrate on a group of funds that are likely to closely match the plan’s needs.
“More than anything, Target Date Compass aims to facilitate the critical conversations that plan sponsors need to have with their advisers about which target-date funds are right for their participants,” says Catherine Peterson, global head of insights programs at J.P. Morgan Asset Management. “These conversations, along with custom reports from the Target Date Compass, are likely to have a critical impact on the fund selections that plan sponsors ultimately make.”
The need for such a program is more critical than ever, Peterson adds. Not only do TDFs represent as a majority of current net flows into defined contribution plans—this growth has also led to a multiplicity of fund choices, making decisions for plan sponsors even more complex (see “Can You Really Set It and Forget It?”).
A white paper from J.P. Morgan breaking down the Target Date Compass program is available here.