Increased transparency around Collective Investment Trusts could boost demand.

  • Collective Investment Trusts are becoming an increasingly important part of the retirement space.
  • In 2018, the SEC announced it would be scrutinizing the fees charged by financial professionals, and how those expenses are disclosed to investors.
  • Though not required to, some forward-thinking trustees and asset managers report key collective investment fund information on fact sheets and upload it to databases such as Morningstar.

Transparency is critical for advisors to successfully prove more options for plan sponsors and participants, and for asset managers to gain more mindshare. Because collective investment trusts are exempt from the more complex ’40 Act compliance requirements they generally have lower legal and compliance costs.  If this type of information was more readily available to advisors, they could more efficiently make direct comparison with other investment options.

In this article reprint, Rob Barnett, head of retirement distribution and product leader for Wilmington Trust’s collective investment trust business, speaks about how greater transparency could pull back the curtain on the benefits collective invest trusts may have on retirement plans.

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This article reprint was published in the November 2019 issue of Ignites.  

Wilmington Trust, N.A. Collective Investment Funds (“WTNA Funds”) are bank collective investment funds; they are not mutual funds. Wilmington Trust, N.A. serves as the Trustee of the Wilmington Trust Collective Investment Trust and maintains ultimate fiduciary authority over the management of, and investments made in, the WTNA Funds. The WTNA Funds and units therein are exempt from registration under the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended. Investments in the WTNA Funds are not deposits or obligations of or guaranteed by Wilmington Trust, and are not insured by the FDIC, the Federal Reserve, or any other governmental agency. The WTNA Funds are commingled investment vehicles, and as such, the values of the underlying investments will rise and fall according to market activity; it is possible to lose money by investing in the WTNA Funds. Participation in Collective Investment Trust Funds is limited primarily to qualified defined contribution plans and certain state or local government plans and is not available to IRAs, health and welfare plans and, in certain cases, Keogh (H.R. 10) plans. Collective Investment Trust Funds may be suitable investments for participants seeking to construct a well-diversified retirement savings program. Investors should consider the investment objectives, risks, charges and expenses of any pooled investment company carefully before investing. The Additional Fund Information and Principal Risk Definitions (PRD) contains this and other information about a Collective Investment Trust Fund and is available at www.wilmingtontrust.com/PrincipalRiskDefinitions or ask for a copy by contacting Wilmington Trust, N.A. at (866)427-6885.