This content is from: Corner Office
The 2014 Pension 40: Laurence Fink
BlackRock CEO Laurence Fink has made a number of provocative statements about the retirement crisis over the past few years, from saying 401(k) plans have failed people to warning that Social Security isn’t a stand-in for savings to calling out activist hedge funds for working against the success of long-term investors. Fink, 62, has reason to care about retirement security: BlackRock is the biggest “investment-only” provider of funds — $572 billion worth — and the third-largest defined contribution manager overall. BlackRock picked up the patent for target date funds (invented in 1993) when it acquired Barclays Global Investors in 2009. In October the U.S. Department of Labor and the Treasury Department issued guidance on how to put insurance products in target date funds; the model is partly based on similar funds offered by BlackRock in 2007. Today the Holy Grail of 401(k)s is to provide guaranteed lifetime income to participants through insurance. Plan sponsors, increasingly focused on reducing fees, primarily through index funds, are also watching BlackRock, which sells the popular iShares exchange-traded funds. In 2013, BlackRock introduced CoRI, an online tool addressing one of the biggest holes in defined contribution plans: letting retirees know just how far their money will last. BlackRock is also active in defined benefits. As one of the largest providers of fixed income in the world, the firm has been telling investors that their portfolios are overexposed to interest rate risk. BlackRock recommends that clients evaluate their bond portfolios and allocate as much as 30 percent to unconstrained funds, which can seek opportunities anywhere in the world and in any sector.