PLANADVISER - Summer 2023 - 5

Investment Menu Design
In Unprecedented Times
Historic rises in inflation plus accompanying interest rate hikes
have been clamoring for attention from the characteristically staid
world of investment plan design. Three advisers weigh in:
Our
'Adviser
Value'
Findings
71% of plan
sponsors that use
a 3(21) adviser
say their financial
wellness program
is very useful vs.
54% of sponsors
that do not use
an adviser.
SEAN BJORK, president of
Bjork Asset Management
Inc., says, " Within the
context of the investment
lineup, real assets have
become a little more frontof-mind
after being something
of a back-burner
item for a long time. "
Rising inflation has
prompted Bjork to work
with plan sponsors to add
investments that hedge
against rising costs by
giving the client exposure
to currencies, real estate
and commodities.
" The real asset funds,
while considered 'other,'
are overall pretty conservative
and are not taking
up a lot of menu space, "
he says. " Overall, we're
... very vanilla. If the DOL
[Department of Labor] says
a plan should exercise
extreme caution, we do
not see that as an invitation
to begin exploring. "
STEVEN MCKAY, head
of global DCIO [defined
contribution investment
only] and institutional
management, Putnam
Investments, notes that
when interest rates were
low, investment menus may
have included riskier fixedincome
options to capture
growth. " Going back three
to five years, [investment
menus] had fixed-income
strategies that were taking
on a little more risk to
capture yield, " McKay says.
" Now, you can get that in
high-grade corporate credit,
so there's a lot of de-risking
going on in fixed income.
" You need to take
a long-term, historical
perspective and not try
and chase short-term
rates. " Stable value in DC
plans protects against
downturns in the market
and preserves capital for
participants, he suggests.
JIM SAMPSON, retirement
plan adviser, Hilb Group
Retirement Services, says,
" I remember, for years and
years, clients saying to
us, 'Why do we have this
TIPS [Treasury inflationprotected
securities] fund
in here? It's always negative,
and no one's got any
money in it. I would say to
them, 'If we ever have any
inflation, that's going to be
what protects you.' Now,
all of a sudden, people are
saying, 'Oh, that's what
that thing is in there for!'
" As to how we construct
investment lineups, we're
pretty boring, and I'm
OK with it, " he says. " The
more stuff that's crazy or
new or different that we
throw at people, the more
we confuse them, so I'm
less focused on offering
people some new thing
than on trying to get them
to save more. "
8% of plans
that use a 3(21)
adviser and 0%
that use a 3(38)
adviser do not
offer advice to
participants,
compared with
30% of plans
without an
adviser.
85% of plans
that use a 3(21)
adviser and
78% that use a
3(38) adviser
provide financial
education on
saving strategies
and prioritization,
while 67% of plans
without an adviser
do so.
Source: 2023 PLANADVISER
Adviser Value Survey
Awards & Innovation | Summer 2023 | planadviser.com 5
http://www.planadviser.com
PLANADVISER - Summer 2023

Table of Contents for the Digital Edition of PLANADVISER - Summer 2023
