CHICAGO, June 5, 2012 /PRNewswire/ -- The combined assets of asset allocation solutions held in all investment vehicles have grown to over $1 trillion in a short period and that growth is expected to continue.
Target Date Funds are consolidating DC plan assets and becoming the dominant investment category. Asset allocation services are destined to play a major role in the nation's retirement system, but due diligence is seriously lacking. While TDFs are complicated, evaluation standards have not developed. As a result, the needs of both plan sponsors and participants are not being met.
While sponsors are looking for guidance, the industry has not identified or managed risk effectively. Most advisors and consultants are also making recommendations at odds with their client's draw down tolerance.
To fill the void, meet the needs and develop winning solutions, the independent CFDD is launching the Custom QDIA Association. As noted by Phil Chiricotti, President, CFDD, "We are excited about the Custom QDIA Association because it is one of the few major opportunities available to the very mature retirement plans industry."
GOALS & PURPOSE
Unlike any other organization, the Custom QDIA Association's mission is to:
- Enhance TDF Analytic Skills
- Develop Standards For The Evaluation Of TDFs
- Identify & Evaluate The Various Types Of Custom Solutions
- Develop Standards For The Evaluation Of Custom Solutions
- Determine When Custom Solutions Are Appropriate
- Identify & Evaluate Custom Solutions Friendly Service Partners
- Facilitate The Design & Implementation Of Custom Solutions
In addition to competitive intelligence and networking opportunities, the association will provide members with a website, data feeds, TDF screens, performance reporting, enhanced CIT reporting and custom solutions workshops.
Our thought leadership will stimulate industry discussions and include a newsletter, dynamic CFDD research, member white papers, webinars, regional meetings and regulatory representation.
Additionally, we will identify and evaluate TDF resources, analytic tools, potential alliance partners and the custom flexibility available from the major recordkeepers.
THE LAST MAJOR OPPORTUNITY
Target Date Fund objectives are blurred and the majority of these funds are far too risky, i.e., risk is being used to offset inadequate savings. Low cost does not mean low risk and asset allocation is far different than risk allocation.
In addition to a high concentration of equities, the majority of today's TDFs also lack risk diversification, inflation hedging and downside protection. In addition to providing a superior product tailored to specific needs, custom solutions offer advisors the opportunity to differentiate, add value and enhance margins.
Flexibility is dropping down market and custom solutions can be structured in many ways. As a result, various service providers will benefit from the growth in custom solutions, including TDF managers and other investment managers, particularly those who were late to the game.
Alternatives could also play a bigger role in custom solutions, but they will have to be priced competitively and demonstrate risk mitigation as well as performance.
Membership will be open to individual advisor/consultant types, other individuals and on a firm level. To facilitate education, each individual advisor member will be provided with two complimentary plan sponsor memberships.
Firm level membership is available to plan sponsors, RIAs, B-Ds, consultants, recordkeepers, TPAs, trading platforms, trust companies, TDF providers, other investment managers, investment analytic providers, glide path managers and other vendors.
The first year membership fee will be waived to individual advisors attending the CFDD's October 22-24, 2012 Advisor Conference and to exhibiting vendors. Strategic Partners will, however, incur a fee and play a key role in the Association's agenda.
To obtain your one year no cost membership to the Custom QDIA Association and register for the CFDD '12 Advisor Conference, go to: http://www.thecfdd.com/CFDDconference2012.
To find out more about membership for non-conference attendees and the benefits of becoming a Strategic Partner, email [email protected].
About The CFDD
The Center for Due Diligence (CFDD) is an independent information and strategic services firm serving the retirement plans advisory industry. Formerly the premier provider of 401(k) program competitive analysis, the CFDD is now focused on providing unbiased resources, industry leading conferences, ERISA advisor evaluation services, intellectual leadership, industry research and advisor surveys.
The CFDD's Advisor Conference is the premier educational and networking event targeting the retirement plans advisory industry. More accomplished retirement plan advisors attend the CFDD's content rich conference than any other industry event.
For more information about our services contact: CFDD, PO Box 8, Western Springs, IL 60558. We can be reached by phone at (630) 662-0284, by fax at (630) 662-0286 and by email at [email protected]. You may also visit our website homepage for more information at: http://www.thecfdd.com and our 2012 Advisor Conference homepage at http://www.thecfdd.com/CFDDconference2012.
SOURCE The Center for Due Diligence