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Retirement Planning > Retirement Investing


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Francois Gadenne, founding chairman of the Retirement Income Industry Association (RIIA), says that the next challenge for the financial services industry is coming up with the “second wave” of products to help address the retirement income conundrum. Over the past few years as the industry has realized there is indeed a shift from accumulation to income, in aggregate they have performed “incremental changes” on existing products–for instance, the mutual fund industry focusing heavily on target-date funds, Gadenne says. Advisors now realize they need to be educated about distribution planning, and aren’t looking for more of the same types of products with different labels, Gadenne says. Because advisors are thirsty for knowledge about retirement income planning, RIIA believes there is room for a Retirement Income Expert (RIE) designation, which advisors can secure as a companion to their CFP, CFA, CLU, or other designation. RIIA, in conjunction with the Retirement Learning Center, is now laying plans on what type of curriculum and education levels would be involved. Given the scrutiny surrounding the senior specialist designations, the RIE certification would at a minimum include continuing education requirements.

Fidelity Investments has unveiled a group of retirement income products and online applications aimed at helping retirees generate more predictable monthly cash flow streams for certain time horizons, or for life. The products revolve around ways to help solve the income- or cash-flow-in-retirement conundrum, and the balance retirees and their advisors strive for between spending retirement assets too fast, and “being too cautious,” says Boyce Greer, president of fixed-income and asset allocation at Boston-based Fidelity Investments, compelling them to “forgo the dreams they’ve saved a lifetime for.”

Fidelity Growth and Guaranteed Income, a deferred variable annuity, can provide a lifetime guaranteed income stream, which Fidelity says is low cost, “approximately 40% lower than the industry-average annuity.” Fidelity Income Replacement Funds is a group of fund-of-funds allocated to institutional shares of Fidelity equity and bond funds, and cash, and paying out–via the firm’s optional, and free, Smart Payment Program–a target rate of cash flow that consists of capital gain, income, and principal repayments tied to a specific horizon date at which time all of the investor’s earnings are to have been paid out, and principal will have been repaid.

Walter Welsh, senior VP and director of government affairs and corporate relations for Hartford Life, Inc., will join the American Council of Life Insurers (ACLI). Welsh, who is retiring from Hartford Life, will serve as ACLI’s executive VP of taxes and retirement security, overseeing policy development on federal tax and retirement security issues facing the life insurance industry.

Vanguard has filed a registration statement with the SEC asking for approval of a new series of mutual funds designed to provide monthly payments to investors in retirement. Vanguard CEO John Brennan said in a prepared statement that the proposed Vanguard Managed Payout Funds, which will be structured as funds of funds, will add to Vanguard’s current lineup of retirement income solutions. The new funds will “appeal to individuals who are seeking a regular income stream in retirement, but who also want to retain access to their accounts to meet unexpected expenses or, potentially, for estate planning reasons,” Brennan said.


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