Very quietly, David Booth
has shifted course at Dimensional Fund Advisors
]. Over the summer the CEO of the Austin-based mutual fund shop switched chiefs for his Managed DC
investment advice product. Managed DC
is a product that is close to Booth's heart
, and has been his pet project for the past two years. The promotion may have revealed another future leader at the mutual fund firm.
In a nutshell, Booth believes that Managed DC
will have the power to make 401(k) plans feel more like DB plans.
One problem that he has run into is that the 401(k) industry itself has failed to warm to Dimensional's product, which relies on models created by Boston University professor Zvi Bodie
So far only one recordkeeper, feisty upstart Aspire, has signed on to integrate the advice into its platform. None of the recordkeeping technology leading platforms, including SunGard, DST or Charles Schwab, have signed a deal to bring the advice platform to their clients.
The slow uptake is the likely cause for the departure of David Deming
, who had been CEO of retirement and who was a key figure in its creation along with Nobel Laureate Robert Merten
in developing the product. Deming had worked with Merten long before he joined Dimensional to oversee Managed DC
Deming's departure (he is now managing director with D H Deming & Co. in New York City) opened the door to another rising star at Dimensional.
has taken over as CEO for Dimensional's retirement division. Lane was the executive who confirmed Dimensional's just-announced partnership
Lane joined Dimensional in 2004 from TIAA-CREF and until July he served as a vice president in the office of the chairman. In a statement, the firm also pointed out that Lane was "instrumental in developing Dimensional's broker-dealer business, along with having oversight of bank and turnkey asset management program business development."
At TIAA-CREF, Lane was director of advisor services, responsible for third-party distribution of mutual funds, annuities, and education savings plans, as well as other financial planning and retirement solutions.
Earlier in his career he served at AEGON Financial Services Group, where he headed marketing and sales for annuities and mutual funds. He was also at Advisor Resources and Equitable Life.
Dimensional's paring with ASPire marks the first time that the Austin-based asset manager has built Managed DC
into a 401(k) recordkeeping platform. Competitors to the advice product include Financial Engines
, Guided Choice
All of those competitors are already deeply entrenched with 401(k) plan recordkeepers and each of them also use more traditional asset allocation theory. Lane's challenge will be to convince them to change course. Failing that, he may shift Dimensional's focus to the product overseas where there are different circumstances on the ground. Indeed, Managed DC
was born as SmartNest
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