U.S.A.
Ibbotson Associates
Investment and advisory services built on innovative research.
Overview
Investment Process
Investment Consulting
Plan Sponsor Consulting
Funds of Funds
Target Maturity Solutions
Retirement Advice Programs
Retirement Advice Programs
Offering retirement plan sponsors and providers the opportunity to brand their systems, Ibbotson Associates provides installed software advice solutions for managed accounts. The solution, Advice by Ibbotson®, combines asset allocation and patented Human Capital methodologies with intuitive tools to determine how prepared a participant is for retirement. Its customized software can be integrated with existing systems to manage the accumulation, transition, and retirement phases.
Customized asset allocation models: Building conservative to aggressive options
Implementation of Advice by Ibbotson begins when Ibbotson consultants build multiple asset allocation models that vary in complexity, representing conservative to aggressive investments with some alternative asset allocations. Using returns-based style analysis, the plan sponsor’s lineup is analyzed to identify each fund’s inherent asset class exposures, fund-specific risk, and fund alpha. Applying a proprietary alpha-tracking error optimization to maximize alpha in a risk-controlled manner, Ibbotson Associates constructs customized portfolios that fit target asset allocation policies for retirement plan sponsors to offer plan participants.
Human Capital: Determining a participant’s retirement readiness
When a retirement plan participant enters basic information into the Advice by Ibbotson solution, patented Human Capital methodology and wealth forecasting determine how to best prepare the participant for retirement based on not only their financial assets, but also their future earnings and saving power. Simulation-based wealth forecasting generates a recommended savings rate, taxable savings, and target retirement age for each participant.
Ongoing management: Reviewing models and portfolios for optimal performance
Once an individual participant’s retirement plan is set up, Ibbotson Associates monitors the results on an ongoing basis. Every quarter, investments in fund-specific portfolios are monitored and reallocated as needed. Each year, Ibbotson Associates reviews the target asset allocation models that range from conservative to aggressive. If a participant’s profile changes significantly during that year, Ibbotson Associates automatically conducts a portfolio review and maps the participant to the appropriate asset allocation target.
Forecasting wealth: Dynamically creating Monte Carlo simulations
The Ibbotson Wealth Forecasting Engine is a simulation-based software component that dynamically generates Monte Carlo forecasts. A basic or advanced version can be integrated with the Advice by Ibbotson solution into an application or website for a seamless experience. The basic version forecasts wealth at the asset class level, showing users how long their money might last given a mix of products, asset types, risk level, and spending rate. The advanced version adds a tool that can issue tailored advice based on extensive forecasts exploring hundreds of future economic scenarios.
Retirement Income Solutions: Managing assets throughout retirement
Advice by Ibbotson can include Retirement Income Solutions, offering seamless service for plan participants at every stage of life. Customizable Retirement Income Solutions from Ibbotson Associates offer institutions a flexible platform featuring wealth forecasting tools that can be branded and deployed on an institution’s enterprise system. The solutions deliver in-retirement asset allocation portfolios that can include immediate annuities, in addition to traditional investment vehicles.
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