The challenge: An appealing, but unfamiliar vehicle
A large Midwestern investment manager with a diverse U.S., international, and global product line wanted to expand its retirement market offerings. Given the cost, pricing, and regulatory advantages of the collective investment trust (CIT) vehicle, the firm’s executive team saw it as a promising option for growing its DB or DC business. They soon realized, however, that the firm did not fully understand the operational infrastructure and administrative requirements of a CIT. Their research also revealed that many plan sponsors, particularly those with DC plans, were unfamiliar with the vehicle.
The solution: A total package
With our fully developed turnkey CIT structure, the security of our dedicated team of established experts, and our long experience in the business, we were a natural partner for the firm’s retirement market initiative. To support the firm’s new offering, our specialists helped develop a strategy and materials for educating clients and prospects about the CIT vehicle. We provided the expertise, technology, and infrastructure needed to launch a CIT targeted to DB plans, which research showed to be the most receptive market.
- Speed to market. The CIT was launched in about half the time it would have taken to introduce a new mutual fund, and at much lower cost.
- Outsourced compliance. As fiduciary for the CIT, our team of experts took on the responsibility of working with the bank regulators who oversee CITs. This relieved the investment firm from dealing with a completely different regulatory regime than that governing mutual funds.
- Flexibility. CITs allow attractive features such as multiple fee classes, a sliding fee schedule based on invested assets, and distinct service fee share classes — all points that can be emphasized in marketing.
The results: Substantial business growth
Being able to offer a lower-expense retirement vehicle has enabled the firm to win new clients and strengthen its relationships with existing DB clients.