Industry leaders combine multi-asset investing capabilities and asset allocation expertise with advanced technology and participant advice tool in next-generation “managed QDIA” option
by Envestnet | Retirement Solutions - Sep. 26, 2016
SEATTLE & CHICAGO--(BUSINESS WIRE)--Global asset manager Russell Investments will soon extend the availability of its Adaptive Retirement Accounts, a customized managed account option designed to be utilized as a qualified default investment alternative (QDIA) option for defined contribution plan participants, by leveraging Envestnet | Retirement Solutions’ Qualified Individualized Life Target Solutions (ERS QuILTS™) technology. With this managed QDIA option powered by the ERS QuILTS™ patented participant advice engine, Russell Investments continues to build on its legacy of expertise in developing customized solutions for defined contribution plans to be able to offer even greater customization at the individual participant level.
In developing this managed QDIA solution, Russell Investments is combining its multi-asset investing and asset allocation expertise with ERS’ QuILTS™ technology capabilities and participant advice tool. The result is a QDIA option that creates a customized glide path for each participant. It is designed to be cost-efficient and easy to use, like traditional target-date funds, but to go a step further toward increasing the probability of participants reaching their targeted retirement income goals. Plan sponsors and advisors will be able to incorporate this new default investment solution into their defined contribution (DC) plans in the first half of 2017.
“Individual differences in participants’ savings and market experiences can have a meaningful impact on targeted retirement income replacement goals. This offers an alternative to target-date funds that focuses primarily on one simple data point—a participant’s age,” said Andrew Scherer, director of defined contribution at Russell Investments. “We believe this solution can help empower the advisor and the consultant to fulfill their fiduciary duties in areas such as plan design and investment selection. It provides a strong managed QDIA option that addresses the industry’s heightened focus on ensuring fiduciary standards are met.”
About Russell Investments Adaptive Retirement Accounts powered by ERS
• The solution automatically captures a participant’s personal information from a DC plan sponsor’s record keeper and human resources system without requiring a participant’s direct involvement or feedback. ERS’ QuILTS™ technology facilitates a seamless connection with the record keeper.
• Personal information—age, gender, salary, current account holdings and contribution rate—is combined with Russell Investments’ asset allocation model to construct a portfolio of the DC plan’s existing investment options which is customized to each individual participant.
• Through a participant user interface developed by ERS, participants have the ability to add in outside assets and incorporate personal preferences regarding savings rate, retirement age, income needs and risk tolerance.
• Each participant’s customized asset allocation is assessed quarterly and adjusted as needed based on progress toward his or her targeted retirement income goal.
• The open-architecture framework empowers advisors to select and monitor a plan’s investments from a broad range of investment products, including passive and active options.
• The solution is designed to provide plan sponsors co-fiduciary support through Russell Investments’ asset allocation model advice and an advisor’s guidance regarding plan investments.
“Participants want and deserve more personalized attention,” said Babu Sivadasan, group president of ERS. “The combination of Russell Investments’ strong asset allocation expertise and ERS’ patented QuILTS™ technology creates a powerful yet easy-to-use next-generation investment alternative, committed to providing all participants with an appropriate level of retirement income.”
About Russell Investments
Russell Investments, a global asset manager, is one of only a few firms that offers actively managed multi-asset portfolios and services which include advice, investments and implementation. Russell Investments stands with institutional investors, financial advisors and individuals working with their advisors—using the firm’s core capabilities that extend across capital market insights, manager research, asset allocation, portfolio implementation and factor exposures to help each achieve their desired investment outcomes.
Russell Investments has more than $244 billion in assets under management (as of 6/30/2016) and works with more than 2,500 institutional clients, independent distribution partners and individual investors globally. As a consultant to some of the largest pools of capital in the world, Russell Investments has $2.2 trillion in assets under advisement (as of 12/31/2015). The firm has four decades of experience researching and selecting investment managers and meets annually with more than 2,200 managers around the world. Russell Investments also traded more than $2 trillion in 2015 through its implementation services business.
Headquartered in Seattle, Washington, Russell Investments operates globally, including through its offices in Seattle, New York, London, Paris, Amsterdam, Milan, Dubai, Sydney, Melbourne, Auckland, Seoul, Tokyo, Shanghai, Beijing, Toronto, Chicago and Milwaukee. For more information about how Russell Investments helps to improve financial security for people, visit russellinvestments.com or follow @Russell_Invest.
About Envestnet | Retirement Solutions
Envestnet, Inc. (NYSE:ENV) is a leading provider of unified wealth management technology and services to investment advisors. Our open-architecture platforms unify and fortify the wealth management process, delivering unparalleled flexibility, accuracy, performance and value. Envestnet solutions enable the transformation of wealth management into a transparent, independent, objective and fully-aligned standard of care, and empowers advisors to deliver better outcomes.
Envestnet | Retirement Solutions (ERS), a majority-owned subsidiary of Envestnet, Inc., provides retirement advisors with an integrated platform that combines one of the industry’s leading practice management technology, research and due diligence, data aggregation, compliance tools and intelligent managed account solutions. ERS leverages Envestnet’s advanced capabilities and resources, along with its experience in investment research, portfolio construction and investment management, to meet the specialized needs of each retirement plan stakeholder, from plan participants to sponsors, advisors to home offices and record keepers to DCIOs.
ERS QuILTS™ is a Qualified Individualized Life Target Solution that is a comprehensive, customized Managed Accounts program.
For more information on Envestnet | Retirement Solutions, please visit www.envestnet.com.
Russell Investments Adaptive Retirement Accounts are a product of Russell Investments Capital LLC (“RICap”). The implementation of Adaptive Retirement Accounts in investors’ portfolios and related investment advice are provided through investment advisers and other financial intermediaries that are independent of RICap and its affiliates. The advice provided by RICap in Adaptive Retirement Planner is based on asset-class level assumptions only.
Adaptive Retirement Accounts are based on a quantitative model (the “model”). There can be no assurance that the model enable the Adaptive Retirement Planner to achieve its objective. Models may be flawed or not work as anticipated.
Investing in an Adaptive Retirement Account involves risk; principal loss is possible. The principal value of the account is not guaranteed at any time.
QDIA compliance is not determined by Russell Investments.
Russell Investments is an independent organization and is not affiliated with Envestnet | Retirement Solutions.
Russell Investments’ ownership is composed of a majority stake held by funds managed by TA Associates with minority stakes held by funds managed by Reverence Capital Partners and Russell Investments’ management.
Frank Russell Company is the owner of the Russell trademarks contained in this material and all trademark rights related to the Russell trademarks, which the members of the Russell Investments group of companies are permitted to use under license from Frank Russell Company. The members of the Russell Investments group of companies are not affiliated in any manner with Frank Russell Company or any entity operating under the “FTSE RUSSELL” brand.
Kate Stouffer Bauman, 206-505-1858
Envestnet | Retirement Solutions
Dana Taormina, 973-850-7305
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