Products March 30, 2023

Adviser Product Partnerships

Lion Street delivers 401(k) management platform with Pontera; Annexus Retirement Solutions partners with iJoin; Capitalize powers rollovers for Robinhood Retirement account holders; and more.

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Lion Street Adds Pontera as Partner to Deliver 401(k) Management Platform

Broker/dealer Lion Street Financial LLC, a subsidiary of Lion Street Inc., announced a partnership with financial technology company Pontera Solutions Inc.

Using Pontera, Lion Street’s wealth managers can analyze held-away account fund lineups, review historical performance and fees, and rebalance accounts. To protect the client’s security, Pontera’s platform is client-permissioned, SOC 2-certified and provides an auditable trade blotter. The platform does not allow actions such as disbursements or beneficiary changes.

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“We believe Pontera will be an excellent value-add to our open-architecture platform,” said John Burmeister, president and CEO of Austin, Texas-based Lion Street Financial, in a statement.

“In addition to eliminating operational hurdles associated with held-away account management, we are looking forward to helping improve Lion Street’s client experience,” said Peter Nolan, vice president of enterprise business development at New York-based Pontera, in a statement.

Annexus Retirement Solutions Partners with iJoin

Annexus Retirement Solutions, a designer of institutional lifetime income solutions, announced a partnership with iJoin, a retirement plan engagement platform provider.

“We can now offer our recordkeepers and their adviser partners access to one of the most innovative lifetime income solutions on the market,” said Steve McCoy, CEO of Scottsdale, Arizona-based iJoin,in a statement.

The partnership aims to develop infrastructure to support ARS’ patent-pending solution, Lifetime Income Builder, making target-date funds more accessible to retirement plan advisers.

“Participants want a solution that can help maximize their savings and generate the greatest possible lifetime income without sacrificing growth or control,” said Dave Paulsen, chief distribution officer of ARS, also based in Scottsdale, in a statement. “With iJoin, we are putting the necessary infrastructure in place to be able to deliver the type of solution they are looking for.”

Capitalize to Power Rollovers for Robinhood Retirement Account Holders

Capitalize Money Inc., a platform to find and transfer retirement accounts, announced a new partnership with Robinhood Markets Inc.

“We are grateful for the trust that Robinhood has put in our product and team,” said Gaurav Sharma, CEO of New York-based Capitalize, in a statement.

Capitalize’s partnership with Robinhood Retirement will help customers find and roll over legacy 401(k) accounts into Robinhood’s new individual retirement accounts. Additionally, Robinhood will be featured on Capitalize’s leading IRA marketplace as a potential destination for users looking to consolidate legacy 401(k) assets.

“Since we launched Robinhood Retirement last year, we’ve seen close to half a million customers take advantage of our IRA, the only IRA in the market with a 1% annual match,” said Steve Quirk, chief brokerage officer at Menlo Park, California-based Robinhood, in a statement. “This partnership will make it much simpler and easier for Americans to roll over their funds.”

Reliance Matrix Partners with BrightDime to Offer Financial Wellness Solution

Reliance Matrix, an employee benefits subsidiary of Standard Security Life Insurance Co. of New York, has partnered with BrightDime to provide financial wellness solutions.

“BrightDime is a user friendly, holistic financial wellness solution aimed at helping employees achieve a brighter and more secure financial future,” said David Stedman, CEO of Charlotte, North Carolina-based BrightDime, in a statement.
The partnership will provide Reliance Matrix clients with personalized financial wellness solutions designed to alleviate stress for their employees.

“By decreasing employee stress around finances, employers are realizing the many benefits of improved physical and mental health in the workplace,” said Kevin Cranston, head of product development at Reliance Matrix, in a statement. “Financial wellness tools like BrightDime are also proven to attract talent and boost employee engagement and retention.”

RetireOne Announces Partnership with Corebridge Financial

RetireOne Inc. announced a partnership with Corebridge Financial Inc. to distribute two fee-based annuity solutions on RetireOne’s fiduciary annuity and insurance marketplace.

Fee-only fiduciaries on RetireOne’s platform now have access to an even larger selection of zero-commission retirement solutions designed to fit the needs of the client.

“We’re actively curating valuable advisory insurance and life insurance products for our partner firms,” said Jeff Cusack, chief distribution officer at San Francisco-based RetireOne, in a statement. “We have a long history of partnering with industry leaders like Corebridge Financial, and we’re excited to add their solutions to our platform.”

“Our partnership with RetireOne will provide more RIAs with access to Corebridge advisory solutions that go beyond traditional portfolio construction strategies to help move financial futures forward,” said Eric Taylor, senior vice president of independent annuity distribution at Houston-based Corebridge, in a statement.

Compliance March 29, 2023

DISH Network Retirement Plan Survives Legal Challenge

The plan had been challenged for excessive fees and underperformance under ERISA, but a federal judge dismissed the complaint.

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A federal judge in Colorado upheld this week a recommendation from a magistrate judge to dismiss a lawsuit brought against DISH Network alleging that it failed to uphold its fiduciary duties in administrating its workplace retirement plan.

The plaintiffs in Jones et al. v. DISH Network, represented by the Miller Shah law firm, had alleged that DISH failed to monitor the fees charged to the plan, as well as the performance of the Fidelity Freedom Funds TDF suite and other actively managed funds in the plan, therefore hurting participant outcomes. DISH should have used its size to negotiate lower fees and better monitored the performance of funds in the investment menu, they alleged.

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In January, Magistrate Judge Scott Varholak recommended the case be dismissed because plaintiffs had failed to propose proper peer funds to which the fees and performance of the existing funds could be compared. He also noted that the plaintiffs compared the average fees for the plan across five years to a single year for one comparator, which was not a legitimate comparison.

Varholak also wrote in his recommendation that the plaintiffs did not have standing to challenge the Royce Total Return Fund, an actively managed fund, because none of the plaintiffs had actually invested in it and therefore were not harmed by it.

The plaintiffs objected to the recommendation in February. They argued that they were damaged by the TDF suite which they did invest in and that the TDF series was evidence of a flawed process. That flawed process also led to the selection of the Royce Fund, and therefore they could challenge it on that basis, they argued. They reiterated that the fees were too high for these funds and that the plan fiduciaries have a duty to continuously monitor the plan.

On Monday, U.S. District Judge Christine Arguello, presiding in the District of Colorado, accepted Varholak’s recommendation and dismissed the complaint. She accepted that the plaintiffs had no standing to challenge the Royce Fund because they could not prove that it was selected along with the Fidelity TDFs as part of the same decisionmaking process and because none of the plaintiffs had, in fact, invested in it. The plaintiffs must show a common practice that injured both them and other investors who did invest in the Royce Fund, the judge ruled.

Arguello also concurred with Varholak by saying the fee comparisons were not apples-to-apples and that fiduciaries can offer a range of prudent options. They are not required to scour the market for the lowest fees on the lowest-risk and highest-return funds, she wrote.

The Miller Shah firm did not return a request for comment.

 

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