Products May 3, 2010

Stylus Web Brings Plan-Level Reporting to Financial Advisers

Markov Processes International (MPI), which specializes in providing technology in the institutional and high-net-worth space, is now making available a Web-based manager research and reporting tool for all financial advisers.
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Stylus Web, evolved from MPI’s more high-touch Stylus Pro Suite, enables financial advisers to provide plan level reports for the 401(k), defined contribution (DC) and defined benefits (DB) markets. It is also available to the wholesale market to provide manager fact sheets, manager comparison, and portfolio-level reports. In addition to retirement plans, the tool can be used for other asset allocation and portfolio construction needs.

Jeff Schwartz, managing director at MPI, told PLANADVISER the firm has wanted to meet demand from advisers for an affordable tool to provide institutional reports and content. The new Stylus Web offers the same type of data as MPI’s Stylus Pro for institutional clients in a more streamlined, affordable solution for the broader adviser marketplace.

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Specifically, the cost is $5,000 per user per year, Schwartz said.

Stylus Web allows advisers to generate different report types, such as single manager, manager comparisons, portfolio-level, single plan, or plan comparisons. It offers Returns-Based Style Analysis (RBSA) analytics, holdings-based information, and other performance-based analytics, and gives advisers access to MPI’s proprietary models to detect style drift. Advisers can use the tool to create analysis or comparisons of hypothetical portfolios or compare managers by assigning peer groups and benchmarks on a user-specified basis, according to the firm.

The tool allows advisers to customize templates, such as what information to include, and add their firms’ branding.

Schwartz said the new offering comes at a time when plan sponsors are demanding more superior quality quantitative research. “Plan sponsors want to see that you’re going to be able to detect problems in a manager before the average investor does,” he said.  

Compliance May 3, 2010

TIAA-CREF Supports Guaranteed Income Options in Retirement Plans

In comments to the Department of Labor (DoL), TIAA-CREF announced its support for giving workers access to annuities in retirement plans.
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In response to the Request for Information Regarding Lifetime Income Options for Participants in Retirement Plans, issued jointly by the DoL and the Department of the Treasury, TIAA-CREF said all Americans should have investment choices in their workplace retirement accounts that would guarantee a lifetime stream of income.

Specifically, TIAA-CREF said workers should have access to a fixed annuity that offers a guaranteed return on investment during their working years. TIAA-CREF said it supports the use of a fixed annuity because it allows individuals to take advantage of interest rates rising and falling across a number of economic cycles, which can provide a higher, more predictable income stream at retirement than if they were to transfer accumulations into a fixed annuity at retirement and annuitize during a low-interest rate environment.  

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“A low-cost, fixed annuity can make all the difference in whether one outlives their savings or can afford life’s essential expenses throughout retirement,” said TIAA-CREF President and CEO Roger W. Ferguson, Jr., according to a press release. “Today most retirement accounts emphasize wealth accumulation, with little thought to how that wealth will translate into retirement income. A guaranteed income option helps ensure that workers build lifetime financial security.” 

To help spark public comment, in February, the DoL and Treasury issued an RFI with 39 questions relating to the lifetime income products issue (see “DoL Calls for Public Comment about Annuities”).  

In its response, TIAA-CREF also said participants should not be required to annuitize their entire retirement accumulation, and should have access to partial annuitization options. This recognizes the unique nature of retirement planning, encourages use of annuities, and addresses participant concerns about depleting savings or removing financial flexibility during retirement, the company said.

In recent years, TIAA-CREF has found that nearly one-third of its participants choose to annuitize some portion of their assets, according to the press release.  Approximately 17% of those beginning an income stream choose to fully annuitize.   

On the issue of expenses, TIAA-CREF stated that keeping expenses low is a crucial element in the successful management of retirement accounts. The company also endorsed steps to increase transparency and establish uniform disclosure of fees, expenses, surrender charges, and returns to help further reduce costs associated with annuity products. 


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