Content area
Full text
Head of Retirement Solutions Group BlackRock
Q Can you tell us a little about BlackRock's role in the retirement ecosystem and your position at the firm?
A As the world's largest asset manager, BlackRock has a tremendous responsibility in managing the retirement assets for investors worldwide. In many ways, the asset management industry is a retirement industry. Between the assets we manage for advisors, defined contribution (DC) investors, public and private pensions, and sovereign wealth funds, we estimate that nearly two thirds of our total AUM of over $7T are linked to retirement in some way.
Within the United States, we are the largest DC investment-only manager at around $1T in DC AUM. We also sub-advise $115B in annuity assets. But it's important to note what we are not: We are not a recordkeeper, we are not an insurer, and we do not manage individuals' retirement assets directly - we partner with intermediaries (recordkeepers, wirehouses, advisors, and broker-dealers) to distribute our asset management products.
In terms of my specific role, I sit within the Retirement Group, which covers our U.S. and Canadian DC and Retirement Insurance (annuity sub-advisory) businesses. I lead our Retirement Solutions Group, which is our internal innovation and product development hub focused on incubating new solutions that address investors' retirement challenges.
Q How do you see the DC market evolving? Are providers of traditional services like recordkeeping going to move into newfrontiers?
A I think we're already seeing a lot of this evolution take place. One way the DC market needs to evolve is to provide income solutions for investors once they reach retirement. Through target date funds, auto-enrollment, and auto-escalation, the retirement system has done a great job enrolling employees early on and investing them appropriately through their working years. But today, they are still largely left on their own at the point of retirement, to translate their nest egg into a paycheck for life. There's a lot of innovation in this space, but I think this is the next big focus and evolution in the DC market ahead of us.
Recordkeepers are going to have to increasingly offer and adopt these types of income solutions as clients, and their advisors, demand them. Moreover, they are being asked to offer...