Nestimate Expands TDF Platform to Nuveen Advisors
Nestimate is partnering with Nuveen to offer its target-date fund (TDF) platform to retirement plan advisors and their plan sponsor clients.
The analytics platform will extend its Target-date Fund Fit Analysis tool to Nuveen advisors at no cost. With this feature, advisors can work with clients to evaluate retirement plan investment menus, including TDFs with embedded guaranteed income solutions.
As concerns over longevity and retirement income inadequacy increase among participants and plan sponsors, Nuveen notes how advisors have been left without a tool that could analyze different lifetime income options for clients.
“As longevity increases and retirement income concerns grow, the ability of advisors to rigorously evaluate lifetime income solutions has become critically important. But retirement plan advisors have faced a growing challenge: there has been no single, objective, centralized framework to evaluate these products alongside traditional investment options,” said Brendan McCarthy, head of Retirement Investing at Nuveen to 401(k) Specialist. “The Nestimate tool is designed to help plan advisers evaluate target date strategies, including those with annuities, so that advisors can objectively evaluate the options available to plan sponsors and help them recommend solutions that can genuinely improve outcomes for participants.”
The Target-date Fund Fit Analysis tool evaluates target-date fund options through three scores: the Qualitative Score, the Quantitative Score, and the Overall Score. According to a press release, the Qualitative Score measures suitability and how well each fund matches a plan’s specific needs across five areas: Glide Path, Management Style, Return Need, Risk Tolerance, and Income Products.
The Quantitative Scoreis produced by Nestimate’s algorithm, which evaluates target-date series by analyzing individual vintage years across performance metrics, risk metrics, risk-adjusted returns, and structural factors including assets under management, inflows, glide path alignment, and manager tenure. The score is then personalized to reflect a specific plan.
Finally, the Overall Score combines both assessments, weighing both the Qualitative and Quantitative scores.
The platform can also generate a Retirement Income Score, or RIS(k), that assesses income adequacy for retirement on a scale of zero to 100. The RIS(k) score considers demographics like age, salary, account balance, and contribution rates, combined with “economic assumptions and stochastic simulations that model thousands of potential retirement outcomes.”
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.