Products November 18, 2016

SSGA Launches Retirement Navigator

The financial wellness tool offers tips to users based on their retirement savings “persona.”
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State Street Global Advisors (SSGA) has launched a financial wellness tool called Retirement Navigator, which provides users with insights into three things they can do to support their future success and live comfortably in retirement.

Megan Yost, head of DC Participant Engagement for SSGA, tells PLANSPONSOR the Retirement Navigator is available to anyone. It’s accessible through SSGA’s Defined Contribution website. 

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The Retirement Navigator uses a short, online quiz that helps individuals understand their approach to retirement planning. After an individual answers seven straight-forward questions, they are provided with a description about how they should approach engaging, saving and investing for retirement. The questions aim to elicit opinions about participants’ satisfaction with their employers’ plan options, how they feel about choosing their own investments, preference for savings advice, as well as their appetite for risk. 

Yost says SSGA’s research has identified that there are four personas that individuals generally fall into: an Armchair Traveler, Tourist, Copilot or Adventurer. Once someone’s persona is identified, the Retirement Navigator offers the user three suggestions about what he or she can do now to feel even more prepared and confident that the user is on track for the retirement he or she envisions. Additionally, users are given the opportunity to view the description and tips offered to the other personas.

“The suggestions are specific to each persona, but not the individual quiz taker,” Yost says. “The goal of the navigator is not to provide individuals advice about how to save, but rather help each user identify their approach to engaging with retirement planning, and from there put them on a path to help them feel even more empowered about how best to plan for their future retirements.”

Investing November 17, 2016

Employers of All Sizes and Types Embracing OCIO Service

More and more institutions, including those with greater than $1 billion in trust assets to invest, have embraced full-discretion OCIO service, according to Cerulli Associates.
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A new report from Cerulli Associates, “U.S. Outsourced CIO Function 2016: Opportunities for Providers to Support Institutions Across Client Segments,” highlights the very strong growth experienced by outsourced chief investment officer (OCIO) providers in recent years.

The informative publication is actually Cerulli’s “first report focused on the OCIO market,” a fact that in itself suggests change in the OCIO landscape, including in market sizing, forces of growth, and demand and needs across client segments. In particular, Cerulli finds the segment of the market in which the OCIO provider actually takes discretion over client assets—as oppposed to just offering advice—has grown impressively, with such mandates doubling in volume to reach nearly $1.3 trillion over the past five years.

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“The growth of the outsourcing market stems from increasingly complex and volatile capital markets, regulatory changes, resource constraints, and demand for improved governance,” Cerulli explains. “As a result, institutions seek timelier decision-making, deeper manager due diligence, and greater oversight of portfolio risks.”

According to Cerulli Associates, the vast majority (85%) of OCIO providers surveyed expect significant new business opportunities from institutions looking to move from an advice-only advisory relationship to a more discretionary OCIO solution.

NEXT: Much wider use of OCIO

“Institutions of all size cohorts are using the OCIO model,” adds Michele Giuditta, associate director at Cerulli. “To date, smaller investors with less than $250 million in assets have been the most frequent adopters of an OCIO solution; however, several OCIO providers indicated there is a trend of outsourcing mandates moving upmarket.”

In fact, Cerulli says some providers believe that this is partly due to new client segments, such as defined contribution (DC) plans and health care institutions showing greater interest in OCIO services.

“Others have cited an increase in demand from nonprofits with greater than $100 million in assets," Giuditta explains. “Cerulli's propriety survey data also identified a greater use of the OCIO model by larger institutions.”

Compared to last year's survey results, OCIOs have increased their proportion of clients with greater than $1 billion in assets under management, the Cerulli data shows. While corporate defined benefit (DB) plans and nonprofit institutions have been the greatest users of the outsourcing thus far, the OCIO service arrangement clearly has a lot to offer other groups of clients as well.

“It can work for nearly any pool of assets,” Giuditta concludes. “Health care institutions, for example, are grappling with many challenges and relying more heavily on investment performance to meet their goals … Anticipated outsourcing growth for DC plans is also high, primarily due to the expected implementation of the Department of Labor (DOL) Conflict of Interest Rule in 2017; the 'DB-ization' or institutionalization of DC plans; and the prominence of 401(k) fee-related lawsuits in recent years.”

Additional information about obtaining Cerulli research reports is available here.  

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