Products March 8, 2017

Morgan Stanley and Ascensus Launch Retirement Program

The two firms collaborated to launch ClearFit, a turnkey solution for small plans which combines Morgan Stanley fiduciary and investment services with Ascensus administration.
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ClearFit is a retirement program in which Morgan Stanley Wealth Management serves as a 3(38) fiduciary under the Employee Retirement Income Security Act (ERISA). Taking a multi-manager approach and utilizing an investment menu comprised of non-proprietary funds, Morgan Stanley will assume responsibility for selecting investments and applying its proprietary glide paths. The firm notes these models are used to provide employees with an easy way to select investments aligned with their goals and timeframe for retirement. 

Ascensus will leverage its technology to help plans remain compliant by offering various administrative services including managing retirement account withdrawal, loan and distribution approvals managed by Ascensus, delivery of certain required notices directly to participants’ homes, and digital and mobile solutions to help boost employee participation.

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“Business owners today have a lot on their plate beyond managing and growing their businesses,” explains Marc Brookman, managing director at Morgan Stanley. “They recognize the importance of offering a competitive retirement program to attract and retain top talent, but generally do not have the time or resources to administer the complexities of most plans. We take the burden off their shoulders and onto ours, so they can remain focused on building their businesses, while giving their employees a clear and convenient way to plan or prepare for retirement.”

Kathleen Connelly, executive vice president of client experience and relationship management at Ascensus adds, “ClearFit is a smart, contemporary solution for business owners who want to deliver a retirement program to their employees that helps them effectively plan for the future. Partnering with Morgan Stanley, we have developed a simple approach for employers to meet their fiduciary responsibilities, while contributing toward the financial well-being of their employees. Our turnkey platform takes the complexity out of plan administration, so they can spend more time focusing on growth strategies for their businesses.”

The Markets March 8, 2017

Vanguard TDFs Were the Best Sellers in 2016

Investors added $96 billion to the portfolios, giving Vanguard a 34% market share.
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Vanguard grew assets in its target-date funds (TDFs) and collective investment trusts (CITs) by $96 billion in 2016, according to Sway Research’s report, “The State of the Target-Date Market: 2017.” Assets in Vanguard’s target-date portfolios reached $449.8 billion at the end of 2016, a whopping 27% increase from the year before, to give Vanguard a 34% share of the $1.3 trillion target-date market.

For all investment managers, assets in target-date portfolios expanded by 20% last year, from $1.11 trillion at the end of 2015 to $1.33 by year-end 2016. CIT target-date assets grew by 29%, from $355 billion to $458 billion, while TDF mutual fund assets grew by only half as much, 16%, from $760 billion to $878 billion.

Sway Research believes that Vanguard’s TDF products benefited from a growing demand for passively managed products. Assets in passively managed target-date portfolios, at $653 billion, now outpace actively managed target-date portfolios, which now stand at $594 billion; hybrid target-date products can claim $89 billion in assets.

“Vanguard was not the only fund company to expand its target-date asset base by $10 billion or more in 2016,” Sway says. “T. Rowe Price increased target-date assets by $24 billion in 2016—the most of any firm with a focus on actively managed target-dates. T. Rowe was followed by Black Rock, which added $16 billion of target-date assets.”

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In terms of the largest growth by percentage, American Funds’ target-date portfolios took first prize, expanding by 40%, or $14 billion. As noted above, Vanguard’s assets in these products grew by 27%. The third-biggest growth in terms of percentage was BlackRock (18%), T. Rowe Price (15%) and Fidelity Investments (8%).

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