Investment Product and Service Launches

Voya Financial and Morningstar announce new adviser managed account program; BNY Mellon to launch first active ETF solutions; AFL-CIO collaborates with multiple entities to distribute CIT funds; and more.

Art by Jackson Epstein

Art by Jackson Epstein

Voya Financial and Morningstar Announce New Adviser Managed Account Program

Voya Financial Inc. has launched its new adviser managed accounts advisory program in collaboration with Morningstar Investment Management LLC.

As one of the latest services within Voya’s suite of resources that support the financial wellness needs of all Americans, the new adviser managed accounts program provides registered investment advisers (RIAs) with resources needed to distribute investment advice to retirement plan participants.

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“In today’s world, financial professionals are becoming increasingly important, particularly as some individuals will need to rebuild their savings due to the financial impacts of COVID-19,” says Jeff Cimini, senior vice president, retirement product, Voya Financial. “At Voya, we are continuously focused on investing in both the resources and technology that can help play a role in advancing a better financial future for all individuals—many of whom are increasingly looking to their employer for guidance and resources. As we continue to think holistically about how the financial wellness needs of individuals will evolve and, importantly, how we can address them, innovations such as managed accounts are an important consideration for employers. By improving savings, investment and retirement ‘spend down’ decisions, managed accounts can ultimately help to have a positive impact on one’s future financial outlook.”

Morningstar Investment Management provides the technology for the adviser managed accounts platform and serves as the fiduciary for portfolio assignment and recommendations on such things as savings rates and retirement age. With Voya serving as the recordkeeper, the adviser-managed accounts program offers an integrated service model, providing participants with a single sign-on to Morningstar Investment Management’s user interface and support services through Voya’s core capabilities. These include financial professional phone support through Voya’s service center, maintaining the connection with Morningstar Investment Management to transfer plan participant data and transactions, and implementation of participant portfolio assignments.

Through the program, employers can also provide their retirement plan participants with personalized advice based on model portfolios aligned with an RIAs firm’s investment expertise.

The program can also help RIA firms when it comes to generating new business opportunities by allowing financial professionals to offer personalized advice in a scalable manner. Voya has already launched the adviser managed accounts program with advisory firms CBIZ Investment Advisory Services LLC and Resources Investment Advisors, a OneDigital company. As the program advances, Voya expects to work with additional firms to offer the service to more clients.

“The main reason we created adviser managed accounts is to give more working Americans access to personalized advice that positions them to achieve the retirement they are working so hard for,” says Brock Johnson, president, global retirement and workplace solutions, Morningstar Investment Management. “To accomplish this objective, we need to make it as easy as possible for advisers to offer and advocate for managed accounts, so we are thrilled that Voya has agreed to support our platform with so many advisory firms.”

BNY Mellon to Launch First Active ETF Solutions

BNY Mellon Investment Management has announced its intention to launch its first active exchange-traded fund (ETF) solutions.

The initial suite is comprised of three sustainable solutions: BNY Mellon Sustainable US Equity ETF, BNY Mellon Sustainable International Equity ETF and BNY Mellon Sustainable Global Emerging Markets ETF.

BNY Mellon says all three are sub-advised by Newton, an equity and multi-asset manager with more than four decades of sustainable and responsible investing experience. The firm says the launch reinforces BNY Mellon Investment Management’s recently announced plans to realign Mellon Investments Corp.’s capabilities in fixed income, equities and multi-asset, and liquidity management with Insight Investment, Newton Investment Management and Dreyfus Cash Investment Strategies, respectively.

The decision, made in partnership with the investment firms, will enhance their respective specialist capabilities, and strengthen their research platforms and global reach.

More information about the ETF solutions will be available when they are launched.

AFL-CIO Collaborates With Multiple Entities to Distribute CIT Funds

The AFL-CIO has announced its collaboration with Wilmington Trust, BNY Mellon, PGIM Fixed Income and AFL-CIO ITC Financial to distribute 12 new target-date collective investment trust (CIT) funds, expanding retirement planning options for its 56 unions and 12.5 million members.

“This suite of target-date CIT funds is a welcome addition to the lineup of financial products which carry the AFL-CIO name,” says AFL-CIO President Richard Trumka. “Defined benefit [DB] plans remain the bedrock of a secure retirement. However, the labor movement’s philosophy that all Americans are entitled to retire with dignity and financial security dictates that we must also ensure that defined contribution [DC] investors’ interests are protected. This product provides a cost-effective solution that brings this proposition to life. We are grateful to our partners for sharing our values and making good on that commitment.”

The AFL-CIO target-date fund (TDF) series was developed as a low-cost product for DC plans. Offered in five-year increments, the target-date solutions provide democratized pricing at a flat fee of 12 basis points (bps) for all investors. Voting proxies for each fund conform with the AFL-CIO’s Proxy Voting Guidelines, per an independent proxy voting fiduciary.

Wilmington Trust will serve as trustee for all 12 funds; BNY Mellon will provide the glide path and index management for the funds; PGIM Fixed Income will manage the fixed-income component of the products; and AFL-CIO ITC Financial LLC, the broker/dealer (B/D) subsidiary of the AFL-CIO Investment Trust Corp., will handle distribution.

“As a trustee with nearly 120 years of experience successfully managing large, complex transactions, Wilmington Trust’s primary goal with this collaboration with the AFL-CIO is to offer high-quality retirement solutions to millions of American workers,” says Bill Farrell, executive vice president, Wilmington Trust. “We’re excited to work with America’s leading federation of labor unions to offer these solutions, and, together, we are confident we can help more U.S. workers effectively prepare for retirement.”

Fidelity Files for Registration of Bitcoin ETF

Fidelity intends to offer a Bitcoin exchange-traded fund (ETF).

According to a filing with the Securities and Exchange Commission (SEC), the ETF is named the Wise Origin Bitcoin Trust, and it issues common shares of beneficial interest.

The trust’s investment objective is to seek to track the performance of Bitcoin, as measured by the performance of the Fidelity Bitcoin Index PR, adjusted for the trust’s expenses and other liabilities. The index is constructed using Bitcoin price feeds from eligible Bitcoin spot markets and a volume-weighted median price (VWMP) methodology, calculated every 15 seconds based on VWMP spot market data over rolling five-minute increments. The index is designed to reflect the performance of Bitcoin in U.S. dollars.

In seeking to achieve its investment objective, the trust will hold Bitcoin and will value its shares daily based on the same methodology used to calculate the index. FD Funds Management LLC is the sponsor of the trust; Delaware Trust Co. is the trustee of the trust; and Fidelity Digital Asset Services LLC is the custodian for the trust and will hold all of its Bitcoin on the trust’s behalf.

15th Anniversary of RPAY: Everhart Advisors

Since being named the 2018 PLANSPONSOR Mega Team Retirement Plan Adviser of the Year, the practice’s assets under advisement have doubled.

Brian Hanna

Since being named the 2018 PLANSPONSOR Mega Team Retirement Plan Adviser of the Year, Everhart Advisors in Dublin, Ohio, has certainly lived up to its “mega” status. The practice has been adding about two to three team members and 25 plans a year on average, says Brian Hanna, a partner and executive vice president, retirement plans, at the practice.

“Most of that is support or non-consultant positions,” Hanna says. “We have also built out our employee education team a good bit. They are dedicated to travel to perform on-site employee engagement.”

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Everhart’s assets have also grown considerably in the past three years. The practice had $1.5 billion in defined contribution (DC) assets under advisement (AUA) in 2018, and that has since doubled to $3 billion. As well, Everhart’s core market plan size is between $2 million and $75 million, and that continues to move up market, Hanna says.

Everhart’s service model, however, has not changed, he says.

“We continue to do the right thing by our clients in terms of bringing the best practices to them,” Hanna says. “We focus primarily on 401(k) plans, but we also have a significant amount of cash-balance expertise. Scott Everhart [the firm’s founder] is a top expert in that world.”

As to how Hanna views the changes the retirement plan industry has seen in the past decade, he remarks, “Obviously, there are more advisers who are now focusing on the space, or at least offering and pursuing opportunities in the 401(k) consulting space versus a decade ago, and that would include more retirement plan specialists. Obviously, that is paired with plan sponsors having a greater understanding of their responsibilities and liabilities as fiduciaries, which creates great opportunities for us as advisers. Sponsors are also much more aware of fees, and, as such, we try to help our clients realize that should not be their sole focus. Rather, they should also consider the value, service and capabilities of their providers. That said, I will note that recordkeeping fees have dropped dramatically in the past decade. Today, almost all recordkeepers are open architecture with fixed fees.

“There has also been a considerable shift in plan sponsors’ focus from simply their fiduciary liabilities, investment selection and prudent process toward their employees’ financial wellness, toward one-on-one engagement and offering their workers comprehensive financial advice,” Hanna continues. “However, this is something that Everhart has always offered our clients in our 20-plus years of doing business. For a long, long time, that was a significant differentiator for us, whereas today, more of our competitors are now offering employee engagement. This new emphasis on holistic financial wellness—including assistance with debt reduction, help with college planning, insight into the best Social Security strategy and help with retirement income solutions—is a positive development for our industry, for sponsors and, mostly, for participants.”

Hanna says he is very optimistic about the future for Everhart Advisors and the industry at large. “We are confident that we have a wonderful industry, providing significant and important services with respect to helping people successfully retire. I have no concern about the future.”

As to what retirement plan advisers can do to improve defined contribution (DC) plans and participant outcomes, Hanna says, “Keep the message simple for both the employer and the employee. Help employees focus on what they can control: being in the plan, saving to an appropriate level, being invested appropriately, understanding their retirement needs and developing a written retirement plan based on sound analysis of their individual situation.”

Hanna says he is also hopeful that the new preponderance of pooled employer plans (PEPs) and multiple employer plans (MEPs) will expand retirement plan coverage to millions more deserving American workers.

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