Sammons Retirement Solutions held a Web seminar on Thursday discussing two new products launched in February.
The LiveWell variable annuity and mutual fund IRA incorporate asset allocation models designed by Morningstar, Ann Hughes, head of business and sales development, said on the call.
“Advisors were asking for assistance with selecting funds,” Hughes said. “We went to Morningstar to see if they could assist us in building asset allocation models and risk questionnaires.”
As of Aug. 15, two models are available along with a risk questionnaire, Hughes said. There are two types of models. One is a fund-specific model that includes pre-selected funds for portfolios of various risk levels. In the other, Morningstar provides an asset class framework across various risk levels. Advisors pick the individual funds based on the asset class framework.
To develop the models, Morningstar first developed asset class inputs to forecast asset class behavior. “We try to forecast the asset class behavior to try to come up with expected returns, standard deviation and correlation,” said Lucian Marinescu, senior consultant at Morningstar Investment Management.