Nuveen Provides Access to Nestimate’s TDF Evaluation Tool

Fintech company Nestimate Inc. and Nuveen LLC, the asset management arm of TIAA, announced a partnership on Monday intended to provide retirement plan advisers with access to Nestimate’s Target-Date Fund Fit Analysis tool.

Advisers and plan sponsor clients have free access through Nuveen to Nestimate’s proprietary algorithm to evaluate retirement plan investment menus, including target-date funds with embedded guaranteed income solutions. Plan fiduciaries can select, implement and monitor guaranteed lifetime income solutions within defined contribution plans that suit plan participants’ goals and demographics.

Target-Date Fund Fit Analysis incorporates a specific plan’s demographics and characteristics when producing qualitative and quantitative scores, as well as scores that assess income adequacy for retirement on a scale ranging from 0 to 100.

The qualitative score measures how well each target-date-fund suite matches a plan’s specific needs for glide path, management style, return need, risk tolerance and income products. The quantitative score evaluates target-date series by analyzing individual vintage years across performance metrics, risk metrics, risk-adjusted returns and structural factors, which include assets under management, inflows, glide path alignment and manager tenure.

The retirement income score, “RIS(k),” considers age, salary, account balance and contribution rate, combined with economic assumptions and randomized simulations that model thousands of potential retirement outcomes.

“What Nestimate has built is … an objective, rigorous framework that allows advisers to evaluate target-date funds and lifetime income solutions on their merits, in the context of the specific plan they’re serving,” said Brendan McCarthy, Nuveen’s head of retirement investing, in a statement. “When advisers have tools like this, they can walk into a plan sponsor conversation with real confidence and real clarity.”

Nuveen manages $1.4 trillion in public and private assets worldwide. Last Thursday, shareholders of U.K.-based asset manager Schroders PLC approved a $13.5 billion sale to Nuveen that was originally proposed in February. The combined manager will have nearly $2.5 trillion in assets under management for institutional and wealth clients.