Products January 8, 2010

Triumvirate Teams for Target-Date Offering

January 8, 2010 (PLANSPONSOR.com) – Three firms have combined forces to offer Target Date and Composite Based ETF Models for qualified plans.   
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According to a press release, ETF Advisor k, LLC, Target Date Analytics LLC, and 7Twelve Advisors, LLC have exclusively partnered together to provide the offering, based on the BrightScope On Target Models methodology. 

According to the firms the glidepath allocation is set up to manage the portfolio “to” the target date as opposed to “through” the target date.  According to the press release, the BrightScope On Target Models emphasize increased protection as the target date approaches, with the object being to protect the assets in the portfolio, not have the highest return once the investor is within 3 to 4 years of the stated target date (see Firms Unveil Target-date Fund Index).      

The BrightScope On Target Models offered are:

  • Current Model
  • 2015 Model
  • 2020 Model
  • 2030 Model
  • 2040 Model      

The multi-asset, ETF based, 7Twelve Models consist of a series of portfolios that utilize seven core asset classes (the composite based models were created by Craig Israelsen, PhD).  Breaking the process down further, each specific model will then assign asset allocation weightings to twelve specific ETFs that have historically have had low correlation, according to the firm (see 7Twelve Balanced Portfolio Claims To Be Better Balanced Benchmark).      

The 7Twelve Models offered are:  

  • 7Twelve Early Career Model  
  • 7Twelve Late Career Model  
  • 7Twelve Transition to Retirement Model  
  • 7Twelve Retirement Income Model      

Additionally, in response to future industry trends, the ETF Advisor k Program now offers ERISA Section 3(38) Investment Management Services.  According to the announcement, this solves two growing concerns in the qualified plan marketplace; reducing a plan sponsor’s personal risk, since the appointment legally transfers the personal risk of being the Plan’s Investment Fiduciary to the ERISA Section 3(38) Investment Manager, and the availability of Investment Adviser Representatives (IARs) that will avoid potential conflicts of interests.  The IAR is now free to focus on non-fiduciary services such as; rollovers, enrollment meetings, plan design, and managing the client relationship.     

The ETF Advisor k Program is a full service qualified plan program that specializes in using ETFs as the preferred investment choice. The program is only offered through Registered Investment Advisers to Plan Sponsors for the benefit of their employees.     

More information is available at http://www.ETFAdvisork.com

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