DALBAR Unveils QDIA Advisory Service

A DALBAR news release said the company’s QDIA Validation establishes a standard that fiduciaries and administrators can use to compare various QDIA products.

The QDIA Validation produces a detailed report that identifies compliance and deficiencies of each investment tested. Deficiencies that often exist can be self-corrected to avoid regulatory action, the announcement said. Unlike fund tracking, the QDIA Validation provides a line-by-line regulatory evaluation of each investment and applies uniform standards to the diverse types of investments that constitute valid QDIA alternatives.

According to the announcement, the documentation includes:

• Risk Assessment – The level of risk associated with the QDIA is associated with familiar consumer and investment risks using DALBAR’s Risk Table.
• Applicability as a QDIA – By examining various factors, including risks and investment policies, strategies and objectives, DALBAR determines which QDIA alternatives represent appropriate uses for an investment under examination.
• Qualification – DALBAR evaluates the investment and investment manager based on applicable Department of Labor regulations and guidelines.

Also, the announcement said, DALBAR compares each investment and the asset classes underlying the investment to respective standards or peers in the following categories:

• Length of investment history (track record of investment and/or asset classes),
• Stability and tenure of investment manager,
• Assets under management (Size),
• Consistency of holdings relative to investment strategies and objectives,
• Correlation to style or peer group,
• All fees and expenses in investment as well as any underlying investments,
• Performance relative to assumed risk within asset classes, and
• Performance relative to a peer group within asset classes.

More information is available at www.dalbar.com.