New Tool Helps Advisors Compare, Choose and Monitor Stable Value Funds

A few clicks on a computer mouse can take institutional investors to almost any information they want about a publicly traded stock, mutual fund or exchange traded fund. It’s never been that way with most stable value funds, but Fi360 and Blue Prairie Group, companies that offer a wide range of services to financial services providers, intermediaries and retirement plan sponsors, are looking to change that.

Speaking at the 2018 SVIA Fall Forum, Fi360 Managing Director Scott Revare and Blue Prairie Group Founder and Managing Partner Matthew Gnabasik demonstrated the latest version of Fi360’s Stable Value Navigator investment database, which they described as one of the largest stable value database now available for advisor use. Drawing on data that Blue Prairie Group has been collecting for more than a decade, it features profiles on 55 stable value funds representing more than 30 stable value managers and $450 billion in stable value assets. Blue Prairie Group is currently migrating the process of data aggregation to Fi360.

Gnabasik said the need for the database among the advisor community is demonstrable. “There are tools for advisors out there,” he said, “but they either aren’t built for advisors or they are incomplete in terms of the data needed for advisors to do their job.”

Revare added that the need has become greater in recent years as advisors have increasingly taken on fiduciary responsibilities in connection with their work for retirement plan sponsors, particularly in terms of evaluating the investment options offered by those plans. “We constantly had the issue of seeing a lineup of funds and being able to evaluate all of them except one (stable value),” he said. “And as the Department of Labor expanded their audit processes and the number of audits they were doing, more and more questions arose about why this one fund was not being evaluated [the same as other funds].”

Revare’s search for more data led him to Gnabasik and Blue Prairie Group. The product that evolved from that partnership—Stable Value Navigator—lets investment advisors screen its underlying stable value database in whatever way they wish using a wide range of data points, and to score stable value funds based on those criteria. Advisors also can compare funds side-by-side, and access a wealth of background information about funds in the database, including information about their wrap providers, subadvisors and competing fund provisions.

Fi360 is working to further expand the reach of its database. Gnabasik pointed out that stable value providers are not charged to contribute their data to it. Revare also invited providers to monitor the database and let Fi360 know if and where they see any errors. “We want to get this right the first time, as the data gets collected,” he said.

Responding to a question from the audience, Revare and Gnabasik acknowledged there is work to do, in partnership with the stable value industry, to coalesce around standard terms and definitions in stable value contracts, so that advisors using the databases can be sure they’re making accurate comparisons between funds.