is jumping on the retirement income train. The opportunity for Putnam CEO Robert Reynolds
and his crew to take a lead on that track remains in place; due to multiple departure warnings, track changes and various delays over the past half decade, that train still has not left the railyards. That breakdown means that Reynolds will have the time to tinker with the engine's technology, and perhaps even the train's route.
| Ed Murphy, Bob Reynolds and Jeff Carney |
To get the word out, top Putnam brass -- including Reynolds, Jeff Carney
and Ed Murphy
-- unveiled their retirement income schematics Tuesday morning at the Four Seasons Hotel in midtown Manhattan to an audience of industry thought leaders, retirement advisors and the media. Official speakers at the event included Shlomo Benartzi
, Charlie Ruffel
and Dallas Salisbury
, as well as the Putnam executives.
So what is the master plan? Putnam's goal, the "prize" as Reynolds calls it, is to reliably replace a substantial part of preretirement income for life.
"That is the ultimate metric of success," Reynolds explains.
To achieve this goal for its plan participant clients, Putnam is reengineering its products engine with its newly developed products, including its absolute return funds and its asset allocation funds. Those products will be welded with income products -- both annuity and non-annuity-based -- that are provided by insurance companies.
Seizing the opportunity to lead the redesign, Reynolds also called for other providers to follow Putnam's lead.
To meet the new view of retirement savings based on view of income throughout the process, Reynolds called for "new alliances and collaborations between asset managers and insurers."
The principles underlying Reynolds' vision include:
lower volatility options in the accumulation phase of the retirement program;
more robust asset allocation strategies for use as the participant's distribution date approaches;
a lifelong product allocation glidepath that links traditional investment products, absolute return products and guaranteed income as a base underlying the portfolio;
The final pieces to the mechanics that Putnam is putting in place are educational tools for the product users that allow them to chart their course and take actions to reroute their journey before it is too late.
Putnam is rolling out a new participant Web site for its clients that will drive these points home. Putnam's Murphy explained that the site is different in three ways.
It is persistent. Every time a participant logs onto the site they will see their balance stated as monthly income. "That monthly figure is always front and center," Murphy explained.
It is incrementally prescriptive. Murphy explained that participants will be shown incremental acheivable changes they can make to put them on a better path to retirement.
It utilizes a simple and easy to use interface. "We made sure that the tool is simple and easy to use," Murphy said, adding that they know that complexity leads to inaction.
Reynolds told the MFWire.com that Putnam plans to roll out advisor and plan sponsor versions of the new Web site later in the first half of the year.
The challenge for Reynolds and Putnam will be to create a perception that their newly re-engineered retirment train is on the right route. Today, Putnam remains the only provider of absolute return funds. If Reynolds' vision is to take off, that will have to change. The Putnam chief unveils a new push for the Boston-based asset manager.
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