Products February 12, 2013

Russell Brings Together TDFs and Managed Accounts

Russell Investments introduced Adaptive Retirement Accounts.
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The funds are designed to improve a participant’s ability to develop a path of personalized, optimal asset allocations that change based on factors beyond age. Russell Adaptive Retirement Accounts provide a way for defined contribution (DC) plan sponsors to further enhance their plans’ default options by leveraging existing investment options and drawing on participant information that can be made available from their recordkeepers (e.g., age, savings deferral rate, current account balance, salary and defined benefit (DB) pension benefit) to determine the appropriate asset allocation for each participant based on how on-target they are toward meeting their specific retirement income goal.   

“Russell Adaptive Retirement Accounts combine some customization elements of a managed account service—typically at a lower cost to the participant — with the benefits of traditional target-date funds [TDFs]. Plan sponsors benefit because Russell Adaptive Retirement Accounts are in line with QDIA [qualified default investment alternative] requirements, while participants receive tailored, well-diversified asset allocations that take into consideration their unique financial situations and personal market experiences,” said Dick Davies, managing director of defined contribution. “This can all be done without direct participant involvement, since the necessary information already resides with the recordkeeper or on the plan sponsor’s human resources system. We believe this next generation of target-date investing will be a significant step forward in helping participants increase their probability of reaching their retirement goals.” 

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Russell partnered with Business Logic, a provider of online investment solutions, to customize their existing secure technology platform with the capability to personalize and automate the methodology in Russell Adaptive Investing for individual participants enrolled in DC plans by drawing on recordkeeper data. Russell will continue to work with Business Logic on an ongoing basis to maintain the platform.

Data & Research February 12, 2013

Asset Managers Embracing Digital Revolution

Global asset managers are cozying up to digital media for their sales and marketing strategies.
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Cerulli Associates’ report, “Global Marketing and Sales Organizations,” predicts that digital media use will increase across all aspects of marketing and sales as companies evolve from product-driven to customer-led organizations. Asset managers are at various stages of development in exploiting digital media.

U.S. companies, particularly in the area of social media, are leading their European and Asian counterparts, the report said. Digital media usage increased in the U.S. from 31% in 2010 to 69% in 2011, despite regulatory obstacles. Most firms incorporate blogs and Twitter messages in their marketing strategies. Many fund houses in Asia, meanwhile, prefer traditional media such as print and television. 

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“Technology is enabling the faster delivery of communications,” said Fiona Maciver, associate director at Cerulli Associates and the main author of the report. “The real challenges for asset management are integrating and adapting organizations to benefit from new methods of engagement.”

More than 30% of global asset managers use digital media to communicate with advisers or other intermediaries, and 25% of firms use digital media to generate press interest. Survey participants said LinkedIn and blogs are the most effective channels, while Facebook was ranked as having the least potential.  

Advertising, brand, communications, creative services, e-commerce, internet marketing, production of marketing material, events, sponsorship and social media are the functions that 50% or more of survey participants suggested are located in the marketing function.

In 2013, most firms (90%) expect to spend more on e-commerce and digital media. 

For information about purchasing the Cerulli report, contact CAMarketing@cerulli.com.

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