Rethinking Target Date Funds: Who Needs Them and How to Compare Them

Blaine F. Aikin, AIFA®, CFP®, CFA, Executive Chairman, fi360

John Faustino, Chief Product & Strategy Officer, fi360

May 24, 2016

Despite the success of Target Date Funds in attracting participant assets in 401(k) plans, fiduciary advisors are decidedly unhappy with the tools available to perform TDF due diligence. Glide paths are hard to characterize and difficult to compare from a prudence perspective. The quality of underlying funds, or sub-asset classes, can change over the course of time, as does the asset allocation of the portfolio. The number of relevant due diligence factors and the lack of stability in the data over time makes the selection and monitoring of TDFs challenging for fiduciary advisors.

Due diligence analysis becomes increasingly important as TDFs dominate inflows under the DOL’s Qualified Default Investment Alternative (QDIA) safe harbor and continue to increase market share in defined contribution plans.

This webinar examines current thinking in the field of TDF due diligence and offers an alternative way to think about who should use TDFs, who shouldn’t, how to educate clients about them, and how fiduciary advisors should compare them in the due diligence process.