Some industry observers believe annuity-like features will play a growing role in target-date funds. "There will be a lot of experimentation on them, but they're on their way," says David Krein, senior director of institutional markets at Dow Jones Indexes.
That said, they're not a cure-all. "The income-guarantee is an important tool in post-retirement," Krein says. "But it doesn't really solve the puzzle on the pre-retirement side regarding what risk level is appropriate as people approach retirement."
As for the June 18 hearing, some people are skeptical it will achieve anything substantive. "If they invite the normal cast of characters that they have been for all of the hearings on advice legislation, then not much use will come out of it," Henkel says.
Fidelity Ramps Up Technology Platforms
Senior executives at Fidelity Investments expect close to 1,000 advisors to move onto their Wealth Central platform, which the Boston-based custodian and clearing firm unveiled earlier this year. In the two months since the advanced platform was introduced, just under 100 advisors have converted all their files to the system, although all new client accounts go straight to Wealth Central.
The new platform is debuting at a time when the firm is experiencing a significant increase in new business. According to Mike Durbin, president of Fidelity Institutional Wealth Services, the custodian opened an average of 17,000 new accounts a month in the first quarter of 2009, up from 13,500 for the same period last year.
Durbin, who joined Fidelity earlier this year after 18 years at Morgan Stanley, believes the RIA channel of the retail financial services arena is poised for significant growth. "In two or three years, the RIA share will be meaningfully greater," he says. "They will take share from a lot of places, but disproportionately from the wirehouses."
Simply put, Durbin calls the RIA model a "better mousetrap." It's a "more compelling business proposition" for clients and a "better economic proposition" for advisors, he said in an interview at Fidelity's annual executive forum conference for advisors in Orlando in early May.
In a separate development, Fidelity's National Financial clearing unit also officially launched two new programs called Business Process Manager and Consulting Services. These services were launched to address an environment where the company's brokerage clients are finding their margins squeezed by client service demands and increased regulation. The first program attempts to streamline operations through work-flow automation and enhanced electronic records and document management, according to National Financial senior vice president Bobbi Masiello.
She adds that the programs can generate significant savings in document storage and retrieval, and that using National Financial's backup facilities "eliminates the need" for a broker-dealer to manage its own disaster recovery program.
Broker Disciplinary Records Could Be Permanent
A Financial Industry Regulatory Authority (FINRA) proposal to expand its online database of broker employment history could make brokers' disciplinary history permanently available for public review.