What is liability driven investing (LDI) and why should you care?
LDI is not a product but a process — one that can include investments selected by an advisor. It uses information readily available for each participant in the plan, which should determine how much risk they need to take based on their current income replacement ratio. That ratio is based on income, age, account balance and deferral rates. While a vast majority of QDIAs use TDFs (which garners most of the money going into packaged products), there’s concern that one size does not fit all. In fact, LDI is being used by larger DB plans, who plan to increase its availability.
A group of advisors will learn more about LDI at the inaugural LDI Bootcamp, held in cooperation with Thunderbird University April 3-5 in Phoenix, and led by leading plan advisor Jim Pupillo.
Pupillo and his partners, whio came from Morgan Stanley’s Graystone Consulting and are now at Hightower, created the program with Thunderbird to provide plan advisors with an alternative to TDFs and other packaged products. Speakers at the Bootcamp include Don Trone, founder of fi360 and current leader of 3Ethos, John Carl of the Retirement Learning Center, Fred Barstein of TRAU and Tom Kmak of Fiduciary Benchmarks, along with Pupillo and his team.
