The Department of Labor fiduciary rule is causing retirement plan advisors to take a closer look at target-date funds, says Brendan McCarthy, a managing director at Nuveen.

“There is a heightened awareness of fiduciary duties and of the possibility of lawsuits for excessive fees that is causing plan advisors to take a new look at target-date funds used in retirement plans,” says McCarthy, who is Nuveen’s Defined Contribution Investment Only head of national sales.

Target-date funds included in retirement plans 10 years ago may no longer be appropriate because of the new regulations and changes in the industry, he says.

“Retirement plan sponsors are asking advisors to re-evaluate their target-date fund selections,” he says. Nuveen is the sixth-largest manager of target-date fund assets in the industry and the third-largest in target date fund net flows as of July 31, according to Morningstar.

"Advisors are evaluating target-date funds that go to retirement versus those that continue a glide path through retirement and trying to determine  which is a better fit for their plan," McCarthy says. "Those that go through retirement have higher holdings in equities and may be more appropriate for  clients who are concerned with longevity risk."