PLANADVISER Weekend Newsdash
Week ending August 10th, 2018

Happy Friday readers! This weekend’s mailing focuses on the always timely topic of Investing, with a particular focus on risk and cost management. As we report below, the growth in target-date fund usage continues to be incredible; missing is a deeper discussion of sequence of returns risk and other potential challenges for participants associated with this growth. At the same time, new research points to a number of drivers behind the acceleration in asset management fee compression, tied to improved automation and stronger competition. We hope you will share some of what you read with a client or colleague.

Editor's choice
Getting Serious About TDF Sequence of Returns Risk
The growth in target-date fund usage continues to be incredible; missing is a deeper discussion of sequence of returns risk and other potential challenges for participants associated with this growth. Read more >
TDF Providers Adapted to Low-Cost Demand, But Plan Sponsors Still Need to Be Diligent
Investors in TDFs need to look beyond price tags to investment strategy to determine the appropriateness of the fees and should be mindful of the relatively tight dispersion of returns within TDF categories, Morningstar warns. Read more >
Asset Management Fee Compression Accelerates
New research from Cerulli points to a number of drivers behind the acceleration in asset management fee compression, tied to improved automation and stronger competition; the research and analytics firm also analyzes the competitive landscape of “robo-advice.” Read more >
Investors in U.S. Equity Funds Earned 8.32% a Year Over the Past Decade
This compares to 8.93% for the average fund, making a shortfall of 0.61 percentage points, Morningstar says. Read more >
Experts Probe Potential Signs of Variable Annuity Sales Recovery
Variable annuities continue to face challenges in the wake of transaction processing disruptions caused by the now-vacated DOL fiduciary rule; however, experts anticipate sales to recover as business processes normalize and newer product types come to market. Read more >
Opportunities Exist, But Future of CITs in 403(b) Plans Remains Murky
Higher education clients with very large 403(b) plans could theoretically benefit from new laws or regulations allowing them to invest participant assets through collective trust vehicles, but for most other non-profit clients, CITs might not make that much sense. Read more >
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Bill Beardsley Exits LPL Retirement Partners Business

At the end of the day there just aren’t all that many people working on retirement plans, so it is only natural that firms will compete for and trade talent.

Participants’ Retirement Outlook Has Improved

Fifty-two percent think they will be able to retire at their ideal retirement age, and 52% say they either somewhat or strongly agree that their savings will last throughout their lifetime.

With Litigation Rush, Fiduciary Insurance Adequacy Is Critical
As a result, insurers are scrutinizing potential customers more carefully, asking for extensive documentation and proof of compliance with stated policies.

Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

Advertising: Paul Zampitella paul.zampitella@strategic-i.com

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