Custom QDIAs

CFDD LAUNCHES CUSTOM QDIA ASSOCIATION

The Growth
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. Fueled by DOL compliance considerations, Target-Date Funds (TDFs) have become the asset allocation and QDIA default option of choice for the majority of DC plan sponsors.  Target Risk Funds, Managed Accounts and other asset allocation solutions have also grown, but at a slower pace.

The Need
Because asset allocation solutions are consolidating DC plan assets, service providers of all types must harness this dynamic growth engine. 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.

Sponsors are looking for guidance, but the advisor community is not identifying and managing risk effectively. Most advisors and consultants are also making recommendations at odds with their client’s draw down tolerance.

The Solution
Unlike any other organization, the QDIA Association will concentrate on the goals below:

• 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

The Association will provide members with a website, unique 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 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. 

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.

The Membership
Membership will be open to individual advisor/consultant types, other individuals, individual plan sponsors 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 RIAs, B-Ds, consultants, recordkeepers, TPAs, trading platforms,  trust companies, TDF providers, other investment managers, investment analytic providers, glide path managers and other supporting vendors.

To find out more about pricing for non-conference attendees and the benefits of becoming a Strategic Partner, email CFDD@TheCFDD.com or click on the tabs below.

To visit the new Linkedin Custom QDIA Association Group, click HERE.

To find out more about the CFDD ’12 pre-conference Target Date Fund Analytic Training, click HERE.