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Staying Supple

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Careful and thorough retirement income projections go a long way toward safeguarding the future, but life is full of so many twists and turns that every retirement plan is subject to change. Being able to incorporate those changes into a plan, to work with the “what if” situations that life throws up, and to find the right investment products to fund the plan is the essence of a successful approach to retirement income generation, says Jim Graves, managing director in charge of marketing for Boston-based FundQuest, a subsidiary of BNP Paribas which provides a range of managed account services through broker/dealers, custodians, and directly to RIAs.

“The issues surrounding the planning of retirement income distribution are different from those that have to do with the asset accumulation,” Graves says. “An advisor has to take a comprehensive view of a person’s life, taking into account changes along the way and also coming up with products that can suit different situations, because planning and implementation to achieve sustainable income are more difficult than asset accumulation.”

Indeed, even the best of retirement plans cannot fare well if an advisor does not have access to a well-defined retirement income process and an integrated platform specifically designed for income distribution, Graves says. Advisors who wish to do their job need a total solution that allows for thorough planning; provides a retirement income technology platform and a diverse set of investment products, and this is exactly what Graves says FundQuest offers through its Retirement Management Services Platform.

Last month, the company launched its retirement income platform using managed accounts to 2,000 advisors nationwide, thereby enabling them to deliver advanced planning, implementation, and monitoring services to help individual investors achieve sustainable income during retirement. The one-stop shop (pricing depends on a host of variables) will offer FundQuest’s distributors and their advisors access to all of the company’s qualitative and quantitative analyses, a full range of investment products that are available on an open architecture platform, as well as a plethora of planning and education tools in order to offer comprehensive, end-to-end retirement planning. The turnkey retirement management platform is customized to integrate each financial institution’s products with FundQuest’s Web-based tools, and combines asset allocation, tax optimization, and ongoing reporting and monitoring with “what if” analysis using Monte Carlo simulations.

“Once you have built a retirement income plan, it will generate a particular set of investment products to meet those goals,” he says. However, there are a lot of “what ifs” that can come up, so “you can’t just set a plan and forget it,” he says. The FundQuest process gives advisors the ability to work in the ‘iterations’ of a person’s life, each of which will result in a different asset allocation and set of investment products suited to the situation. “

One of the greatest benefits of the FundQuest model, according to Graves, is that the advisor and the client work closely together during the planning and analysis phase. After clients have been involved with whatever tradeoffs their “what if” situations can result in, and have seen how solutions are created based upon those situations, they are more likely to proceed with the resulting investment recommendation, he says, and to consolidate their assets at the guiding institution. Indeed, investors are not comfortable with product-centric, “one-investment-does-it-all” approaches to retirement planning, and they are also wary of planning approaches that are too complex or inflexible or lack ongoing monitoring.