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.
- 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.
- 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.
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.
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.
OppenheimerFunds is not undertaking to provide impartial investment advice or to provide advice in a fiduciary capacity.
Mutual funds and exchange traded funds are subject to market risk and volatility. Shares may gain or lose value.
Discussion of custom or semi-custom risk-based models is not intended to represent investment advice that is appropriate for all investors. Each investor's portfolio must be constructed based on the individual's financial resources, investment goals, risk tolerance, investing time frame, tax situation and other relevant factors.
OppenheimerFunds does not recommend any specific asset allocations. Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns and does not assure a profit or protect against loss.