Products September 20, 2018

Investment Product and Service Launches

MassMutual debuts RetireSMART TDF series with J.P. Morgan glide paths; Delta Data launches proprietary product manager; and AXA doubles down on SRI/ESG integration.

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The MassMutual RetireSMART Target Date Funds, available through 401(k)s and other defined contribution (DC) retirement plans offered by Massachusetts Mutual Life Insurance Co., now offer enhanced glide paths sub-advised by J.P. Morgan Asset Management Inc.

Formally, the fund family will now be called the MassMutual RetireSMART by J.P. Morgan Target Date Funds.

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The new glide paths are available within the 12 MassMutual RetireSMART TDFs, ranging from the In Retirement Fund to the 2060 Fund. Important to note, the MassMutual RetireSMART Target Risk Funds are not being sub-advised by J.P. Morgan.

Tina Wilson, head of MassMutual’s Investment Solutions Innovation group, says the new glide paths are “more sensitive to balancing investment risk and investors’ goals, especially as retirement savers approach and enter retirement.”

As the sub-adviser, J.P. Morgan will create a glide path using its long-term capital market assumptions and MassMutual participant data.  J.P. Morgan employs four main principles to managing glide paths, which include defining success as maximizing the number of retirement savers who attain an adequate level of income replacement at retirement; designing glide paths to withstand the stresses of real-life saving and withdrawal patterns; dynamically managing the multi-faceted risks of defined contribution investing, balancing the need to minimize risk and maximize returns; and employing a well-diversified glide path allocation strategy.

In addition, J.P. Morgan will provide tactical asset allocation expertise to take advantage of short- to intermediate-term opportunities.

Delta Data Launches Product Manager

Delta Data, a provider of software and data management solutions for the mutual fund industry, announced the launch of its Proprietary Product Manager (PPM), a tool that supports the construction, trade execution and administration of proprietary funds for trust companies, recordkeepers, insurance companies and broker/dealers.

According to the firm, PPM allows the creation and management of proprietary products that include collective investment trusts (CITs), target-date funds, fund of funds, wrapped funds and variable annuities. PPM allows “seamless management of custom securities by distributors in a single system of record alongside traditional mutual funds.”

As the firm points out, because proprietary products are highly customized and have multiple fee tiers, distributors often carry thousands of slightly different versions that may have the same lead security. In most legacy platforms each permutation is treated as an entirely different security, creating additional work for operations teams tasked with maintaining them.

AXA Boosts SRI/ESG Integration

AXA Investment Managers says it is moving to the next phase of its commitment to strengthen its socially responsible investment (SRI) capabilities, further integrating these with the firm’s environmental, social and governance (ESG) investing expertise.

AXA leadership says the firm is integrating ESG analysis into all of its investment platforms, providing fund managers with access to proprietary ESG scores and key performance indicators (KPIs) in their front office tools, as well as additional ESG data and research.

Additionally, new specialists are progressively being embedded into each investment team to help fund managers incorporate ESG and impact analysis into their investment processes.

Within AXA, the firm is building a central SRI team focusing on thematic research, corporate governance and shareholder engagement as well as on developing quantitative solutions. Climate, human capital and health have been identified as the key thematic priorities of the centralized team, and specialists are appointed for each of these three themes. ESG analytic experts are also embedded in the investment teams to enhance capabilities most relevant to the firm’s key asset classes.

Data & Research September 20, 2018

Vast Majority of Intermediaries Expect Financial Wellness Programs to Expand

Eighty-four percent of intermediaries expect sales of financial wellness programs will expand in the next three to five years, Prudential found.

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While there has been a lot of talk in recent years about financial wellness programs, Prudential research has found that they are only getting started. Eighty-four percent of intermediaries expect sales of financial wellness programs will expand in the next three to five years. Fifty-seven percent think it is very important for their firm to expand sales of these programs.

Seventy-nine percent think financial wellness programs are beneficial for employees. Seventy percent say employers are requesting them. Sixty-one percent think these programs are a way to leverage current client relationships, and 61% think they are a good way to grow their practice.

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From the employer’s perspective, 79% say it is good to have a workforce that is financially secure, and 83% offer some type of financial wellness program.

Advisers believe that financial wellness programs should help workers with long-term financial goals, such as saving for retirement, and 22% think the top benefit for employers are that financial wellness programs can help their workers retire on time and securely.

However, 31% of advisers say the top challenges in selling financial wellness programs is cost, followed by the time it takes to sell a company on a financial wellness program (22%), lack of employer buy-in (21%), the inability to measure return on investment (ROI) (20%) and lack of awareness (8%).

Most advisers prefer to add capabilities piecemeal (33%), however nearly as many (26%) develop an overarching strategy for a financial wellness program.

In conclusion, Prudential says that “financial wellness programs provide a timely opportunity for intermediaries to expand their relationships with employers. While many intermediaries appear to view financial wellness programs as a future opportunity, they may be underestimating the extent to which employers are already offering financial wellness programs in some capacity. Intermediaries may find the opportunity greatest when they work with employers to establish a clear definition of financial wellness that fits the individual employer’s needs and workforce strategy.”

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