Asset manager Russell Investments is pushing further into the managed account realm.
Its Adaptive Retirement Accounts, the firm’s managed account offering, is now a qualified default alternative investment for the more than 80 employees at Nyhart Actuary and Employee Benefits.
It could prove to be a strong strategic play for Russell.
Nyhart is a retirement plan consultancy, with more than 1,000 clients accounting for over $22 billion in retirement assets.
Nyhart partners with RIA advisors around the country, specializing in delivering participant education services, said Craig Harrell, a consultant and principal at Nyhart.
Those partnerships with plan advisors could provide fertile inroads for Russell’s Adaptive Retirement Accounts.
“We work closely with our advisor partners in rolling out new products to our mutual clients,” said Harrell. “In most cases, advisors will help determine whether the ARA product fits within the investment objectives of a retirement plan.”
Russell’s ARA line is the only managed account product Nyhart works with for the time being, though Harrell said that many of the consultancy’s advisor partners offer customized investment solutions for participants.
While Nyhart is under no contractual obligation to offer Russell’s managed accounts exclusively, the consultancy has no current plans to pursue relationships with other managed account providers, according to Harrell.
Andrew Scherer, director of defined contribution for Russell Investments’ U.S. advisor-sold business, said Nyhart is the third sponsor to adopt its relatively new managed account offering.
“The market is seeing strong interest among plan sponsors in the adoption of managed accounts,” said Scherer.
“They provide an opportunity to evolve beyond usage of target date funds, which treat all participants of the same retirement age equally, whereas managed accounts adjust allocation based on participants’ unique circumstance,” added Scherer.
Pricing for the ARA accounts will depend on plan demographics, explained Scherer, but he did say the program is designed to be priced comparably to fees on the average target-date fund.
Russell couples its investment acumen with technology provided by NextCapital, a Chicago based fintech provider the received $6 million in capital from Russell last year.
Scherer says he’s pleased with the “robust functionality” of the software NextCapital has created.
“It allows for a seamless gathering of participant information from a plan’s record keeper and its human resource system,” he said.
That means participants can have a completely customized investment strategy that is periodically rebalanced, “all without any direct participant involvement,” added Scherer.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
