© 2014. Retirement Income Industry Association. All rights reserved.
Retirement Income Industry Association®, RIIA®, is the owner of the RIIA® logo, a registered collective
membership mark and trademark/service mark; the owner of RIIA's Retirement Management Analyst(sm),
RMA(sm), and logo, a certification mark and the owner of the RMA curriculum; and the owner of RIIA
Market Insight(sm), RMI(sm), and logo, a service mark. Retirement Income Industry Association®, RIIA®, is
also the owner of the “View Across the Silos(sm),” “Household Balance Sheet View(sm)” “Household
Balance Sheet Benchmark(sm),” “Retirement Policy Statement(sm)” and Retirement Management Journal(sm),
RMJSM, and logo, a service mark of RIIA® (Collectively, "Marks, Logos and Property"). Only RIIA®, its
authorized members and/or certified persons, in compliance with usage guidelines, may use the Marks,
Logos and Property. The Marks, Logos and Property may not be copied, imitated, or used, in whole or
in part, without the prior written permission of RIIA®.
An Introduction to RIIA
Thought-Leadership and Best Practices
History of RIIA’s Founders
• Rational Investors: 1996-2001
• Mass-Customized Investment Advice over the Internet
• Sold to S&P in 1999
• Retirement Engineering: 2001-2006
• Intent to create a new industry
• Pricing income in terms of $/lb.
• RIIA: 2006-Present
• The View Across the Silos: Thought-Leadership
• The RMA designation: Best Practices
Founding Members (2006)
Alliance Bernstein
American Century
AVIVA NAR
Deloitte Consulting
Genworth Financial
Greenwich Associates
Ibbotson/Morningstar
FundQuest
Franklin Templeton
ING U.S. Financial Services
Lipper, a Reuters Company
MassMutual
McElroy, Deutsh, Mulvaney & Carpenter
Mercer HR Services
Merrill Lynch/Bank of America
MetLife
MFS Investment Management
Nationwide Financial
Oppenheimer Funds
PLANSPONSOR
RBC Insurance/Royal Bank of Canada
Retirement Engineering, Inc.
The 401(k)Company/Schwab
The Phoenix Companies
Russell Investment Group
Symetra Financial
UBS Global Asset Management
Wealth2K
Wells Fargo
RIIA Today
• Institutional Members
• 86 since 2006, 44 active now, including:
• TIAA-CREF, New York Life, MassMutual, Prudential,
Challenger, JPMorgan, Morgan Stanley, Bank of
America/Merrill Lynch, BNY/Mellon, BlackRock,
• Individual Members
• about 1,000 since 2006
• 5,000 members on LinkedIn Group
• RMA Certificate Holders
• about 100 since 2010
• In 2014 the RMA designation will be taught at 5
Universities: BU, TTU, SSU, NSU and FIU
Thought-Leadership
• Board Members
• Special Advisors to the Board
• Conference Keynote Speakers
• Retirement Management Journal Authors
• Virtual Learning Center Webinars Speakers
• Retirement Management Analyst Curriculum Book Authors
• RIIA Market Insight Research Consortium Members
Thought-Leadership: Board Members
Regular Board Members
• Chip Castille, BlackRock
At Large Members:
• Adam Bryan, DTCC
Joan Boros, Esq.
• Karen Wimbish, Wells Fargo
Elvin Turner, Esq.
• Bill Hunter, Bank of America/Merrill Lynch
Stephen Saxon, Esq.
• Ron Mastrogiovanni, HVS
Mathew P. Fink, retired ICI
• Ed O’ Connor, Morgan Stanley
• Tim Murphy, Investors Capital
• Anand Rao, PwC
• Rob Capone, BNY/Mellon
• Jan Gundersen, TIAA-CREF
Former Board Members:
• Peng Chen, Morningstar/DFA
• Tom Johnson, MassMutual/NewYork Life
• Sri Reddy, Prudential Financial
Thought-Leadership: Special Advisors
Academic Advisors including:
• Shlomo Benartzi, UCLA
• Zvi Bodie, Boston University
• Jeff Brown, University of Illinois
• Michael Finke, Texas Tech University
• Larry Kotlikoff, Boston University
• David Laibson, Harvard University
• Annamaria Lusardi, Dartmouth College
• Moshe Arye Milevsky, Ph.D.,York University
• Olivia Mitchell, Wharton School, University of Pennsylvania
• Wade Pfau, American College
• Meir Statman, Santa Clara University
• Jack VanDerhei, Temple University and EBRI Fellow
• Stephen Zeldes, Columbia University
Thought-Leadership: Special Advisors
Executive Advisors, including:
• Hans Carstensen, retired Chairman, AVIVA
• Farrell Dolan, retired, Fidelity
• Keith B Jarrett, Chairman, Rockport Funding, LLC
• Jerry Kenney, Merrill Lynch/Blackrock
• Louis Lataif, Boston University School of Management
• Sandra Timmermann, Gerontologist and founder of the MetLife Mature
Market Institute
Thought-Leadership: Special Advisors
Practicing Advisors, including:
• Mitch Anthony, Advisor Insights, Inc.
• John Mulligan, CFP®,CIMA, AIFA, RMA
• Anna Rappaport, FSA, MAAA, Anna Rappaport Consulting
• Chuck Robinson, Northwestern Mutual Wealth Management
• Sheldon H. Smith, Esq, Partner, Holme Roberts & Owen LLP
• Don Trone, Strategic Ethos
• Jarrod Upton
Thought-Leadership: Officers
• Francois Gadenne, Co-founder, Chairman of the Board
• Al Turco, Co-founder, Counsel to the Board
• Udo Frank (retired Allianz Global Investors), Treasurer
• Joan Boros, Secretary
• David Ehrenthal, Business Unit Director, Membership Services
• Deborah Burkholder, Business Unit Director, Events
• Robert Powell, Business Unit Director, Publications
• Elvin Turner, Business Unit Director, Research
• Francois Gadenne, Business Unit Director, Education
• Marcia Mantell, Business Unit Director, Consumer
Thought-Leadership: Keynote Speakers
• 2006: Meir Statman
• 2007: Ray Kurzweil
• 2008: Ray Burham, David Warsh
• 2009: Bruce Sterling, Howard Bloom
• 2010: Sam Khoury, Buddy Donohue, Marsh Carter
• 2011: Doug Short, Charlie Baker, VDH, Clint Watts
• 2012: Frank Casey, Tim Garrett, Herb Meyer
• 2013: Michael Kitces, Michael Lane
• 2014: David Blanchett, Sandy Timmermann, Bill Baldwin
Thought-Leadership: RMJ Authors
Since Spring 2011 issue, 64 RMJ papers from authors including:
• Shlomo Benartzi
• Steve Sexauer
• Laurence B. Siegel
• Michael Finke
• Wade Pfau
• Matt Grove
• Harry Markowitz
• Anna Rappaport
• David Blanchett
• Michael Zwecher
• Peng Chen
• Michael Kitces
• Helen Simon
Thought-Leadership: VLC Speakers
• Two webinars per months, with speakers such as:
• Michael Finke, Ph.D., CFP® - Ph.D. Coordinator and Associate Professor
of Personal Financial Planning at Texas Tech University
• Sarah Holden, Senior Director of Retirement & Investor Research at the
Investment Company Institute (ICI).
• Andrew Blumberg , Group Director, DTCC Analytic Reporting for
Annuities
• Dennis Gallant, President of GDC Research
• Zachary S. Parker, CFP, MBA, 1st Vice President – Income Distribution &
Product Strategy, Securities America
• Stan “The Annuity Man” Haithcock - nationally recognized annuity expert
and annuity critic
• Michael Kitces - Partner and Director of Research for Pinnacle Advisory
Group
• Dana Anspach, Principal, Sensible Money, LLC
Thought-Leadership: RMA Governance Board
• Al Turco, Esq., McElroy, Deutsch, Mulvaney & Carpenter,LLP
• Joan Boros, Esq., Stradley Ronon Stevens & Young, LLP
• Harold Evensky, Evensky & Katz
• Patrick Fitzgerald
• Francois Gadenne
• Craig Adamson, LPL Financial, LLC
• Michael Finke, Ph.D. Texas Tech University
• Lawrence Ford
• Ruth Ann Murray, Boston University, Metropolitan College
• Zachary Parker, Securities America, Inc.
Thought-Leadership: RMA Authors
• Beth Allan
• Ray Grubbs
• John Mulligan
• Dana Anspach
• Stephen Huxley
• Wade Pfau
• Brian Barnier
• Cliff Jurdi
• Paul Samuelson
• David Blanchett
• Paul Kaplan
• Jack Sharry
• Jason Branning
• Mitzi Lauderdale
• Doug Short
• Brent Burns
• Chris Leone
• Al Turco
• April Caudill
• Michael Lonier
• Elvin Turner
• Larry Cohen
• David Macchia
• Alain Valles
• Harold Evensky
• Brett Machtig
• George Wilbanks
• Michael Finke
• Aaron Minney
• Michael Zwecher
• Jeremy Fletcher
• Steve Mitchell
• Francois Gadenne
Thought-Leadership: Research Committee
• Kathleen Beichert, SVP, OppenheimerFunds
• David Blanchett, Morningstar Investment Management
• Andrew Blumberg, DTCC, Analytic Reporting for Annuities
• Ron Bush, Brightwork Partners, LLC
• Larry Cohen, Strategic Business Insights
• Matt Greenwald, Mathew Greenwald & Associates
• Lilah Koski, Koski Research
• Louis Lombardi, PwC
• Kim McSheridan
• Lisa Plotnick
• Anna Rappaport
• Linda Schwartz, TIAA-CREF
• Jack Tatar, GEM Research Solutions
The Evolution of RIIA’s Conferences
A Time to Present Best Practices
RFC14: The Art and Science of the Retirement Policy Statement
RSC14: Retirement Opportunities are the beginning of great enterprises
RFC 13: Practical Solutions in an Uncertain World
RSC13: The Household Balance Sheet View
A Time to Ask The Right Questions
RFC12: What does it take to be a top retirement income advisor?
RSC12: What can Defined Contribution and Retail Distribution learn from one
another after five years of independent product and process development?
RFC11: Are We Rome or Byzantium?
RSC11: The Future of Retirement Income Solutions and Delivery:
The Retirement Puzzle in an Age of Uncertainty
A Time to Define the Problems
AMAD10: Making Powerful Connections to Advance Retirement Income Security
RSC10: New Products, New Communications, New Technologies, New Processes
AMAD09: Traditional Retirement Planning Failed: How Will A New Approach Work?
IIR09: The New Normal as Seen from the View Across The Silos
The RMA Curriculum: Many Types of Best Practices
Old
Current
Validated
Thought-Leadership
The RMA Curriculum: Many Types of Best Practices
Old
Current
Validated
Thought-Leadership
Account
Client
Household
Health/Wealth
The RMA Curriculum: Many Types of Best Practices
Old
Current
Validated
Thought-Leadership
Account
Client
Household
Health/Wealth
Fear-based,
Maximizing
Aspiration-based
Goals-based
Adaptive toolbox,
Minimax
The RMA Curriculum: Many Types of Best Practices
Old
Current
Validated
Thought-Leadership
Account
Client
Household
Health/Wealth
Fear-based,
Maximizing
Aspiration-based
Goals-based
Adaptive toolbox,
Minimax
Personal Mastery of Professional Planning Skills
Vocabulary Test for Data Input in Software Programs
The RMA Curriculum: Many Types of Best Practices
Old
Current
Validated
Thought-Leadership
Personal Mastery of Professional Planning Skills
Vocabulary Test for Data Input in Software Programs
Probability First
(Expert Models of “Known Risks”)
Safety First
(Holistic Checklists for “Uncertainty”)
The RMA Curriculum: Many Types of Best Practices
Old
Current
Validated
Thought-Leadership
Personal Mastery of Professional Planning Skills
Vocabulary Test for Data Input in Software Programs
Probability First
(Expert Models of “Known Risks”)
Safety First
(Holistic Checklists for “Uncertainty”)
AUMs / Readiness
(Financial Literacy)
AUMs / Fundedness
(Risk Literacy)
The RMA Curriculum: Many Types of Best Practices
Old
Current
Validated
Thought-Leadership
Personal Mastery of Professional Planning Skills
Vocabulary Test for Data Input in Software Programs
Probability First
(Expert Models of “Known Risks”)
Safety First
(Holistic Checklists for “Uncertainty”)
AUMs / Readiness
(Financial Literacy)
AUMs / Fundedness
(Risk Literacy)
Risk Profile / Salary Replacement
Household Balance Sheet
(Assets, Liabilities, Risk Exposures)
The RMA Curriculum: Many Types of Best Practices
Old
Current
Validated
Thought-Leadership
Personal Mastery of Professional Planning Skills
Vocabulary Test for Data Input in Software Programs
Probability First
(Expert Models of “Known Risks”)
Safety First
(Holistic Checklists for “Uncertainty”)
AUMs / Readiness
(Financial Literacy)
AUMs / Fundedness
(Risk Literacy)
Risk Profile / Salary Replacement
Household Balance Sheet
(Assets, Liabilities, Risk Exposures)
Investment Allocations
(Risky Assets Diversification = Upside)
Retirement Allocations
(Upside, Floor, Longevity, Reserves)
The RMA Curriculum: Many Types of Best Practices
Old
Current
Validated
Thought-Leadership
Account
Client
Household
Health/Wealth
Fear-based,
Maximizing
Aspiration-based
Goals-based
Adaptive toolbox,
Minimax
Personal Mastery of Professional Planning Skills
Vocabulary Test for Data Input in Software Programs
Probability First
(Expert Models of “Known Risks”)
Safety First
(Holistic Checklists for “Uncertainty”)
AUMs / Readiness
(Financial Literacy)
AUMs / Fundedness
(Risk Literacy)
Risk Profile / Salary Replacement
Household Balance Sheet
(Assets, Liabilities, Risk Exposures)
Investment Allocations
(Risky Assets Diversification = Upside)
Retirement Allocations
(Upside, Floor, Longevity, Reserves)
Investment Policy Statement
Retirement Policy Statement
Best Practices to Retirement Policy Statement
1- Buying “Lifestyle Time” for clients
- “Fundedness” , Investment-based, Goals-based, Product-based
2- Finding the relevant Assets, Liabilities and Risks with the
“Household
Balance Sheet View(sm)”
3- Transitioning from Asset Allocations to “Retirement
Allocations”
- Mitigating risk exposures: “First Build a Floor…”.
- Optimizing Performance: “… Then Expose to Upside(sm)”.
The “Retirement
Policy Statement“ as a protective process
Should You become an RMA?
Appendices
The RMA Curriculum: Full Range of Stakeholders
The RMA’s Arc of Development started with DC, moved to Relationship
Advisors and returned to both DC and Retail Transactional Advisors
PwC
Best Practices: The Three Disruptions
The Presence of Client Risks and Needs that
are not addressed by traditional Investment
Management
– These un-systematic “Chance” and “Behavioral” risks mean that
retirement management cannot be a “single cylinder” risk
management engine based only on “risk retention/diversification”
Retirement management is 4-cylinders risk
management engine that includes:
– risk “retention”, risk “management, risk “pooling”,” risk “avoidance”
The Client’s View: A Staged Retreat?
Best Practices: The Three Disruptions
Solutions that exist Outside of the traditional
Business Models.
• The traditional business model is “gathering assets.”
• The business model of retirement is “paying a monthly check”
Incremental thinking and misunderstood
adoptions will not “move the needle”.
Retirement Planning Best Practices by Primary
Client Channel
DB
DC
Retail
Household Balance Sheet Planning
Income Statement Planning
RIIA 2005: The Vision of the View Across the Silos
Best Practices: The Three Disruptions
Academic Justifications and Practice
Validations expand beyond the traditional
focus on Wealth
•
Traditional financial management is a special case of the larger financial framework that
has been developed and formalized since the 1950s.
Retirement Management re-introduces
minimum consumption in the financial
equation
•
•
The goal of investment management is to expose the client’s wealth to upside potential
subject to a risk profile.
The goal of retirement management is “First Build a (minimum consumption) Floor, Then
Expose (to wealth growing) Upside”.
Best Practices: Ten Key Competencies
1- Working with both wealth and consumption needs
2- Focusing on the right client tiers: Fundedness
3- Selecting the proper client-matched, fundamental planning strategy
- Investment-based, (start with the portfolio)
- Goal-based, (start with the budget)
- Product-based, (start with the account)
4 - Developing the full household balance sheet
5- Planning with human, social and financial capital
6- Mapping risk exposures
7- Recommending risk management techniques allocations: Retirement Allocations
8- Selecting implementation process approaches
9- Recommending account locations and product selections
10- Reviewing the plan on a recurring schedule
Best Practices: The Measures of “Fundedness”
Are your tools, processes and products focused on the right
client segment?
Fundedness Tools
Overfunded
Constrained
Underfunded
Wealthy Households
and Participants
Fundedness measures
based on Financial Assets:
C/FC, FC/C
Fundedness measures based
on Financial Assets:
C/FC, FC/C
C’/FC, FC/C’
Fundedness measures
based on Financial
Assets:
C/FC, FC/C
C’/FC, FC/C’
Affluent Households
and Participants
C’/FC, FC/C’ as well as
Fundedness measures
based on HHBS:
A/L
C’/FC, FC/C’ as well as
Fundedness measures based
on HHBS:
A/L
C’/FC, FC/C’ as well as
Fundedness measures
based on HHBS:
A/L
Mass Market
Households and
Participants
IF HHBS data incomplete,
Fundedness measures
based on a salary
replacement ratio:
If HHBS data incomplete,
Fundedness measures based
on a salary replacement
ratio:
:
If HHBS data incomplete,
Fundedness measures
based on a salary
replacement ratio:
Investment Based Planning/Flooring
PwC | RIIA | SBI
Goals Based Planning/Flooring
Product Based Planning
Best Practices: The Household Balance Sheet
Best Practices Template: HHBS
Best Practices: Fundamental Planning Strategies
A consistent conceptual framework across all stakeholder and
client segments
Fundamental
Planning
Strategies
Overfunded
Constrained
Underfunded
High Net Worth
Households and
Participants
Investment-based
planning
(Generational Wealth)
Goal-based planning
(Deferred Consumption)
Product-based planning
(Best practices)
Affluent Households
and Participants
Goal-based planning
(Deferred Consumption)
Goal-based planning
(Deferred Consumption)
Product-based planning
(Best practices)
Mass Market
Households and
Participants
Product-based planning
(Best practices)
Product-based planning
(Best practices)
Product-based planning
(Best practices)
PwC | RIIA | SBI
Best Practices: Mapping Risk Exposures
Best Practices: The Retirement Allocations
Asset
Allocations
Retirement Allocations
(Risk Management Techniques
Allocations)
Stocks Upside
Implementation Process
Approaches
Total Return
(60%) (risk retention)
(60%)
Bonds Floor
(30%) (risk management)
(30%)
- Longevity
(risk pooling)
(0%)
Cash Reserves
(10%) (risk avoidance)
(10%)
SWPs
Time Segmentation
Ladders
Insurance
Insurance
Cash
Mapping Products to Retirement Allocations
Retirement Allocations
(Risk Management
Techniques Allocations)
Upside
Implementation
Process Approaches
“Products that Wrap….
Total Return
… The Market,
SWPs
Time Segmentation
… The Market,
…The Price of Income,
…The Household Balance
Sheet,
… A Ladder,
… The Mortality Credit,
(risk retention)
(60%)
Floor
(risk management)
(30%)
Longevity
Ladders
Insurance
Insurance
… The Mortality Credit,
Cash
… Tax and/or Inflation.”
(risk pooling)
(0%)
Reserves
(risk avoidance)
(10%)
Better Understood,
Better Managed,
Better Protected.