Press Article

Article published on Jun 20, 2006
Ignites.com (subscription)
By Bonnie Bauman

GuidedChoice, a Calif.-headquartered online advice provider, is working to make its new software-based retirement income planning program available to financial services firms.

The program, dubbed GuidedSpending, is a retirement income planning tool, along the lines of Fidelity's Retirement Income Advantage, for example. At its heart, the program helps retirees develop a retirement income plan of action.

GuidedSpending is the next chapter of the firm's GuidedSavings program, which offers guidance, advice and managed accounts for retirement plans, says Tom Condron, vice president of business development at the firm, which was founded in the late 1990s by Harry Markowitz, the father of modern portfolio theory.

"We've handled quite well the saving part, and now this is the spending part," Condron says.

The availability of the program in the marketplace may provide options to financial services companies working to establish themselves in the burgeoning retirement income arena. That's because many of the firms that don't have the resources of big players like Fidelity have been hesitant or unable to spend the money it takes to build their own comprehensive retirement income planning programs.

To be sure, some firms have been searching for a solution like the one that GuidedChoice is offering.

"There are a lot of providers who are not going to spend $50 million or something like that to build a comprehensive process from scratch," says Ron Bush, a principal with Brightwork Partners.

For some firms, the program that GuidedChoice is offering may be the missing piece to the retirement income initiatives they have been working to establish.

"GuidedChoice is coming out with something that other providers can plug in to what they're doing," Bush says. "It certainly is addressing a market need because anybody that is playing in the 401(k) area is looking for tools that will help them address these emerging retirement income needs. And also it can be used as a tool for asset retention."

Indeed, GuidedChoice is positioning the program as an asset retention solution for financial services firms.

"It is a huge asset retention vehicle, because if somebody is getting to the end of their saving time and they're looking for help as to what they do with their savings, the first person that gets to them that makes sense is probably who is going to get the assets," Condron says.

He points out that GuidedSpending is a way for financial institutions to give a full analysis of an individual's retirement income situation and then back up that analysis with either a product set or a single product.

Any financial services company will be able to use the program, Condron says. "We can be used either as just the engine and a financial institution can build around us. We can be a holistic solution and they can use everything we have — interface and all — or they can use somewhere in between," he says.

Condron says his firm is in the process of working with an advisor channel to hone the program and work out all the details. Reports say the program may be ready for launch sometime in September.

Francois Gadenne, head of the Retirement Income Industry Association, a new trade group focused on retirement income issues, says that GuidedChoice's upcoming offering fits in nicely with the solution he envisions for the retirement income opportunity that now exists.

"The offerings that are going to be in demand will be a blend of processes, investment products and insurance products, so this is one of the three legs of things that should be successful in the market," Gadenne says.