Products February 27, 2025

Product and Service Launches – 2/27/25

Apollo, State Street private-debt to release new ETF; Betterment Adviser Solutions launches solo 401(k)s; LPL Financial selects SS&C to support retail alternatives business; and more.

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Apollo, State Street Prepare to Launch ETF

State Street Corp. and Apollo Global Management Inc. are preparing to launch a new exchange-traded fund. The SPDR SSGA Apollo IG Public & Private Credit ETF, set to trade under the ticker PRIV, is moving closer to its debut, as indicated by a recent regulatory filing and details on the New York Stock Exchange’s website.

Regulatory filings show that private credit will comprise between 10% and 35% of the fund’s portfolio, while illiquid investments will be limited to 15%, as required by regulations. The actively managed ETF will have a 0.70% expense ratio.

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 Betterment Adviser Solutions Launches Solo 401(k)s

Betterment Adviser Solutions, a custodian for registered investment advisers, announced the launch of an all-digital solo 401(k), designed for independent advisers and their self-employed clients. Betterment’s solo 401(k) is built upon its existing recordkeeping system that powers Betterment at Work. 

With its new solo 401(k) offering, Betterment Adviser Solutions aims to solve this issue by providing a full-scale, digital experience for both advisers and clients.

The solo 401(k):

  • Enables paperless account opening with no setup fees;
  • Supports fully digital contributions;
  • Allows spouse participation at no additional cost; and
  • Offers both Roth and traditional tax strategies.

 LPL Financial Selects SS&C to Support Retail Alternatives Business

SS&C Technologies Holdings Inc. announced that LPL Financial Holdings Inc., a provider of investment and business strategies for financial advisers, has broadened its relationship with SS&C Technologies.

LPL Financial, which uses SS&C’s Brokerage Solutions, will leverage SS&C Altserve to grow its alternatives business.

“LPL has launched LPL Alts Connect to enhance the overall alternative investment experience, broaden our available investment suite and enhance education and awareness across our adviser base,” Cheri Belski, executive vice president and head of investment management solutions at LPL, said in a statement.

Newfront, Pave Announce Partnership to Simplify Employee Benefits

Newfront Insurance Services LLC, the insurance brokerage firm, and Pave, the compensation benchmarking and management platform, announced a partnership to improve how companies approach employee benefits and compensation.

Key benefits include:

  • Companies can get a clearer view of total rewards market intelligence across benefits and compensation.
  • Comprehensive advisory networks: Clients have access to consultants and experts who can assist with total rewards strategies. 
  • Preferred pricing: Customers of both Newfront and Pave will have access to exclusive discounts within each respective customer ecosystem.

Human Interest Sets New Standard for Customer Experience

Human Interest announced the Customer Experience Guarantee will go into effect on March 1. By terms of the guarantee, if certain standards are not met, Human Interest will provide administrators 50% off their next invoice. Participants will be eligible for a $25 gift card.

The standards include:

  • All of an administrator’s inquiries submitted through the Human Interest Support Center will receive a nonautomated response within four business hours;
  • All of a plan’s contributions will be processed within five business days of running payroll;
  • All of a participant’s distributions will be sent to their bank account within two business days;
  • All of a participant’s calls during business hours will be answered within five minutes; and
  • All of a participant’s initial inquiries submitted through the Human Interest Support Center will receive a nonautomated response within four business hours.

“We’ve received extremely positive feedback from financial advisers so far about our industry-leading 401(k) Customer Experience Guarantee,” said Rakesh Mahajan, Human Interest’s chief revenue officer, in a statement. “Advisers want to provide their clients with an exceptional service experience.”

Compliance February 26, 2025

Money Market Funds Damaged by ‘Flawed’ SEC Amendments

According to the Investment Company Institute, the most significant changes were made without public input. 

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U.S. Securities and Exchange Commission amendments intended to address concerns about redemption costs and liquidity are “flawed” and have caused damage to prime money market funds, according to a report from the Investment Company Institute.  

In July 2023, the SEC adopted rule amendments that included raising minimum liquidity requirements for money market funds, which it said would provide a more substantial liquidity buffer in the event of rapid redemptions. The move was made in response to the economic shock that resulted from the outbreak of the COVID-19 pandemic in March 2020, when money market funds had significant outflows. According to the regulator, this contributed to stress on short-term funding markets, which in turn led to government intervention to improve liquidity. 

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According to the report, the SEC’s amendments have led to “significant consolidation and reduced competition” of the prime institutional segment of the money market fund industry. While strengthening the resiliency of the funds was a “worthy objective,” the ICI report stated that the inclusion of mandatory liquidity fees on prime institutional funds was the “most consequential change” and that it was made without public input. The rule requires institutional prime and institutional tax-exempt money market funds to impose a liquidity fee when they have net redemptions of at least 5% of net assets. 

“MMF sponsors, service providers, and investors were not provided a meaningful opportunity to 

comment on critical elements of the rule amendments that were ultimately adopted,” the ICI report stated. “The full impact of the SEC’s MMF reforms may not yet have been realized, as a prime institutional MMF could find itself in a situation where it is forced to institute a mandatory liquidity fee.” 

According to the SEC, in addition to providing a “more substantial liquidity buffer” in the case of rapid redemptions, the changes also eliminate provisions that allow a money market fund to suspend redemptions temporarily. This is intended to help reduce the risk of a run on money market funds during times of market stress. 

The ICI’s report cited comments made at the time by SEC Commissioner Hester Peirce, who dissented from the majority and voted against the amendments. Pierce said the changes imply that the regulator believes its judgment “is superior to that of money market funds, their sponsors, their boards, and their shareholders.” She added that there is no way of knowing if the benefits provided by the new rules outweigh their benefits.  

“Now that the final implementation deadline has passed, we can begin assessing whether the SEC’s MMF reforms worked as the previous SEC leadership said they would,” the ICI report stated. “The bottom line is that many of the concerns with the 2023 reforms have come to fruition, leaving the MMF market facing greater uncertainty.”  

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