The video titled “Excel 401k – Babu Sivadasan & Bill Chetney,” published on November 9, 2017, features a discussion at the Excel 401k conference in Las Vegas. 401k Specialist interviews Babu Sivadasan from Vestwell and Bill Chetney from GRP Advisor Alliance about the rising importance and adoption of Collective Investment Trusts (CITs) in the 401k space.
Key points discussed:
- CITs Overview: CITs have been around for 90 years and are designed for retirement plans. They are becoming more popular due to fee compression and plan sponsors’ desire for simplification.
- Evolution and Trends: There has been a shift from mutual funds to CITs in retirement plans due to their cost-effectiveness and efficiency. The transition from mutual funds to CITs is seen as a return to older practices but with modern advantages.
- Growth Expectations: Both interviewees expect significant growth in the adoption of CITs, driven by the partnership between their firms, which combines investment expertise with technology and distribution.
- Educational Challenges: There’s an ongoing need to educate plan sponsors and participants about CITs. While they are a straightforward investment vehicle, the transition from familiar mutual fund paperwork to CITs can be daunting.
- Industry Impact: The partnership between Vestwell and GRP Advisor Alliance is highlighted as one of the largest of its kind, aimed at delivering scalable, simplified retirement solutions.
The video serves as a brief but insightful discussion on the future trajectory of CITs in the 401k industry.