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In late October 2017, OppenheimerFunds hosted a meeting at our New York home office for retirement plan advisors. Attendees represented a diverse cross-section of the plan-advisor community with respect to broker/dealer affiliation, experience in the defined contribution (DC) marketplace, and assets under management.

We polled our audience to get their thoughts on issues relevant to the DC marketplace—particularly concerning target-date funds and the DOL Fiduciary Advice Rule.


 

1. The good news: Advisors see the DOL fiduciary rule as an opportunity for their business.

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  • Almost half of those polled had a positive view when it came to the DOL Fiduciary Advice Rule’s impact on their business models.
  • Another 30% indicated that they felt it was a non-event that won’t create a burden.
  • By seeing the DOL’s Rule as an opportunity to grow your business, we believe you can position yourself to help navigate your clients through a difficult topic.

2. Some bad news: Many retirement advisors do not actively monitor underlying investment options in target-date funds.

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  • While advisors may be looking at the performance of their target-date funds (TDFs) overall, one-third of them aren’t looking at the underlying investment options that comprise those TDFs.
  • Per the DOL’s guidance, fiduciaries need to consider the TDF’s asset allocation, glide path, and fees when reviewing investment options.
  • You may wish to partner with your plan sponsors to facilitate review procedures and document results. For more on evaluating target-date funds, read our paper.

3. Custom models can provide an opportunity to tailor solutions to your plan sponsors’ needs.

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  • Retirement advisors like the flexibility of custom models.

  • Additionally, the ability to replace underperforming investments in custom models allows plan sponsors to manage fiduciary obligations.

  • For more insights into the benefits of custom models, learn more about our (k)ustom Advisor Program, a full suite of materials that help with the planning of building a custom solution.

Read our survey results.

For further insights on target-date funds, read our latest blog.

About Our Survey Methodology

We surveyed 35 retirement-plan specialist advisors from the Metro New York area in October 2017 as part of a retirement summit hosted by OppenheimerFunds. Participation in the survey was voluntary, and respondents remained anonymous.

Where indicated, some questions allowed for multiple answers, and some questions were contingent upon answering a previous question a certain way. Of the respondents who answered demographic information (23 advisors), 52% identified as being with an independent broker/dealer, 22% with a national broker/dealer or wirehouse, 17% with a regional broker/dealer, and 9% as “other.” In addition, approximately 30% of respondents to demographic questions self-reported their assets under management in excess of $250 million, whereas more than 50% of them indicated assets under management of $100 million or less.