BrightScope Inc. today launched a new tool that allows investment-only 401(k) asset managers to pinpoint which retirement plans are using their funds — as well as those of their competitors.
In the past, these fund firms — which don't serve as record keepers to defined contribution plans — were able to determine how much was invested in their funds on a given record keeper's platform, but couldn't obtain information on specific funds, said Ryan Alfred, co-founder and president of BrightScope.
But with BrightScope's new Beacon analytics tool, Mr. Alfred said, asset managers can find out which retirement plans are using the funds, as well as the broker-dealer or adviser who sold the funds to the plan sponsor.
“This is the first time we've looked at the marketplace through the lens of the fund and the asset manager,” said Mr. Alfred. “Everything we've done up to now has been plan-centric, and we have tools that advisers can use to identify plans they can prospect.”
According to Mr. Alfred, the program will provide users with a universe of funds ranging from the largest — such as
American Funds Growth Fund of America — to the smallest. Clicking on a fund, managers can view which plans are using the fund, and who sold the funds to those plans.
Mr. Alfred said this information will help fund firms determine to which plans and distribution channels they should marketing and support service. It can also make the wholesalers' jobs easier, as they'll know which plans to target, Mr. Alfred noted.
“When we talk to large [investment-only] asset managers, they feel like they're wasting money,” he said. “They don't know who has the real opportunities for the fund. This helps them figure out which advisers are working with plans that use a competitor's funds and which platforms to be on in order to increase distribution.”
MFS Investment Management was the first subscriber to the program in its private beta version.
“I think it [the new program] will adjust our marketing strategy, but it’s a little too early to say how it will exactly,” said Martin Beaulieu, head of global distribution at MFS. “It will let us see where all MFS products are placed in platforms and plans, and hopefully there will be some pleasant surprises.”
BrightScope culls most of its data from Form 5500, the annual report that plans file with the Labor Department. Right now, the firm's records go back to 2009, but next year it expects to include more data going back to 2007, Mr. Alfred said.
