Plan sponsors are increasingly turning to outsourced or discretionary investment solutions for their funds post the global financial crisis, according to Tim Barron, chief investment officer for consulting firm Segal Rogerscasey.
While pre-packaged products or fund of funds once dominated the outsourcing environment, there have been significant improvements in the choices, with attractive replacements for some of the outdated, often conflicted models, said Barron. “There are now many more choices of outsourcing providers, allowing plan sponsors to ‘shop’ and feel more comfortable that they have partnered with the best solutions firm,” he said.
Also, Barron noted that the financial crisis coupled with the freezing or closing of many corporate defined benefit plans has also caused plans to reexamine their governance structure. “It has become a very busy space with a myriad of offerings and players as the high expectations for a dramatic flow of assets drives an evolving set of solutions and vendors.”