Products October 4, 2010

State Street Unveils Wealth Connect Upgrades

State Street Corporation has enhanced its wealth manager services capabilities.
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A news release said investment policy compliance, administrative reviews, trade order management, and integrated account management capabilities have been added to the State Street Wealth Connect platform.  Wealth Connect provides access to State Street through a customizable Web-based platform that is integrated with State Street’s investment servicing solutions including global custody, accounting and corporate actions monitoring.

The new enhancements provide wealth management clients with a solution that automates several previously manual, time-consuming functions such as account set-up and maintenance, cash disbursements, and asset transition, State Street said.

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Clients can customize their operational workflow and approval rules to fit their processing requirements. The new pre- and post-trade compliance capabilities include a rules-based engine with alert functionality that automates the monitoring of investment objectives.

“Our wealth management clients, who are typically registered investment advisers, trust companies and family offices, are increasingly looking for one solution that seamlessly ties together all of the functions they need in the front, middle and back office, including analytics, order management, trade settlement and confirmation and pre- and post-trade compliance,” said Steve Nazzaro, senior vice president of State Street’s wealth manager services business, in the news release. 

In support of Regulation 9 requirements, the new enhancements also enable clients to design and complete trust review questions online, prompt for additional users’ actions, and create an audit trail of all completed steps, State Street said. The Wealth Connect platform also enables wealth managers to manage the accounts and holdings of their high net worth clients whether they are held in custody at State Street or with other custodians. 

Compliance October 4, 2010

Auditors Suggest EBSA Could Do More about Conflicts of Interest

An audit report claims the Department of Labor’s Employee Benefits Security Administration (EBSA) could do more to protect retirement plan assets from conflicts of interest.
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The DoL’s Office of Inspector General (OIG) said the narrow definition of a fiduciary and the lack of regulations dealing with conflicts of interest have hampered EBSA’s enforcement program.  The OIG recommended that EBSA broaden the definition of a fiduciary for investment advisers, and develop regulations requiring disclosure of all conflicts of interest and consideration of conflicts of interest in selection of service providers.  

According to the OIG, the Assistant Secretary for EBSA agreed with its findings and recommendations.  

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The audit found that EBSA has taken several actions to evaluate and reduce risk of harm to plan participants and beneficiaries from conflicts of interest in service providers, including: 

  • developing two new regulations regarding fee determinations and disclosures and is requiring this information be reported to EBSA;  
  • following up on the 2005 SEC report on conflicts of interest and initiating 12 specific investigations;  
  • working with the SEC to develop guidelines for plan fiduciaries to use in selecting and monitoring specific service providers; and  
  • implementing the Consultant Adviser Project, which concentrated resources on improper, undisclosed compensation by certain service providers.  

  The OIG said that while these actions go a long way toward creating transparency in plan activities and improving protections for plan assets and participant benefits, EBSA needs to do more to protect plan participants and beneficiaries from conflicts of interest in service providers. Specifically, EBSA needs to address other critical regulatory areas, such as broadening the definition of fiduciary status for investment advisers, requiring disclosure of all conflicts of interest and consideration of these conflicts of interest by plan fiduciaries when selecting service providers.   

The report said the narrow definition of a fiduciary and the lack of regulations dealing with conflicts of interest has hampered EBSA’s enforcement program. For example, while the SEC reviewed 24 pension service providers and took action on 13 instances of inadequate disclosure of conflicts of interest, EBSA, using its regulations, could not take any enforcement action on the inadequate disclosure to pension plans. 

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