The Center for Due Diligence

CFDD Marketing Commentary

4/18/2013--The shift to low cost passive investments and the ability to transfer investment management margins to asset allocation solutions will have a major impact on the industry. Custom asset allocation solutions offer advisors an unprecedented opportunity to grow, differentiate, add value and increase margins. Future growth will be fueled by following the flow of funds, margins and increasing participant savings through asset allocation solutions, including custom solutions. Custom large plan solutions are plan specific while custom asset allocation solutions offered by advisors are generally specific to the advisor’s skills and employment status. The CFDD’s 2013 preconference workshop will show advisors how to harness this growth.

CFDD Retirement Plans Commentary

4/18/2013--The interest in custom target-date funds and other asset allocation solutions is increasing and dropping down market. Custom solutions are poised for growth, but they are not for all plans and they may or may not result in a total cost savings. When pursuing a custom solution, sponsors generally hire a consultant, but they still need appropriate staffing and decision making capabilities. Sponsors should also be aware of the fiduciary issues and the need for strong communications support. The goal of a custom solution is to increase control and get something better. Before initiating the process, sponsors would be wise to define their views about risk, active vs. passive management, global asset management and downside protection.