Products May 18, 2023

Investment Product and Service Launches

John Hancock Retirement launches dynamic default investment feature; Tata AIA upgrades Life Fortune Guarantee Pension; Putnam Investments launches emerging markets ex-China ETF; and more.

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John Hancock Retirement Launches Dynamic Default Investment Feature

John Hancock Retirement has launched a dynamic investment feature available to new clients converting from an existing plan.

With the new feature, participants older than an age set by the plan sponsor will be transitioned automatically from a target-date fund to the John Hancock Personalized Retirement Advice managed account program, which uses Morningstar Investment Management LLC’s advice methodology.

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“Managed account programs, such as Retirement Advice, are designed to provide customization and adapt to a participant’s evolving financial needs and goals,” said Wayne Park, John Hancock Retirement’s CEO, in a statement. “Nearly 90 percent of our retirement plan participants recently said that professional management of their retirement investments and savings would positively impact them getting financially prepared for retirement. We’re pleased we can offer this solution for those who feel it will benefit their retirement readiness.”

Tata AIA Upgrades Life Fortune Guarantee Pension

Tata AIA Life Insurance Co. Ltd., headquartered in Mumbai, India, has introduced a more powerful version of its flagship annuity plan, Tata AIA Life Fortune Guarantee Pension.

The new version includes some critical improvements, including higher annuity rates and death benefits. The plan also offers multiple tailor-made guaranteed income options 

“With regular guaranteed income for life to help us manage our expenses after retirement, Tata AIA Life Fortune Guarantee Pension is an excellent financial tool to achieve that goal,” said Samit Upadhyay, chief financial officer, in a statement. “The plan helps our consumers save enough before they retire and ensures stable income when the regular salary income stops.”

Putnam Investments Launches Emerging Markets ex-China ETF

Putnam Investments announced the launch of Putnam Emerging Markets ex-China ETF, a new actively managed, transparent exchange-traded fund with a distinct investment focus on emerging market companies, excluding investments in China and Hong Kong.

“We are delighted to continue to add to our growing roster of fundamentally oriented, actively managed equity ETFs,” said Carlo Forcione, head of product and strategy at Putnam, in a statement. “This new offering provides our clients and the broader marketplace with important choice and flexibility in emerging markets equity investing, without the typical heavy weighting of China.”

The ETF will invest at least 80% of its net assets in securities of emerging market companies. Investments will exclude those domiciled in, or whose stocks are listed for trading on an exchange in, China, as well as companies domiciled in Hong Kong.

SponsorCloud, Equity Trust Company Provide Automated Solution for Alternative Investment Offerings in IRAs

Equity Trust Co. and SponsorCloud LLC, a real estate investment management platform, launched a solution to streamline the user experience for IRA investors while providing access to alternative investments in real estate.

“Our collaboration with Equity Trust was created on the mutual mission to allow IRA investors and sponsors to more effectively interact,” said TJ Lokboj, chief revenue officer at SponsorCloud, in a statement. “For too long, this has been a very manual and complicated process. We are very excited to build this technology with Equity Trust and look forward to streamlining the process of making investments through self-directed IRA accounts more accessible.”

Sponsors and syndicators have the added benefit of exposure to more than $11 trillion in retirement accounts, as of December 2022.

AllianceBernstein Launches AB High Yield ETF

AllianceBernstein Holding LP and AllianceBernstein LP announced the launch of AB High Yield as an active exchange-traded fund on the New York Stock Exchange.

“The AB High Yield ETF broadens our offerings for clients by ultimately supplying them with a flexible vehicle to weather various market conditions,” said Noel Archard, global head of ETFs and portfolio solutions at AllianceBernstein, in a statement. “We remain focused on enhancing our ETF suite to meet our clients’ ever-evolving needs, and this launch unlocks a new opportunity to invest in additional income-generating products.”

The ETF seeks to provide income by emphasizing broad diversification, dynamic beta exposures and AB’s quantitative and fundamental research.

Axxcess Platform Adds Direct Indexing

Axxcess Wealth Management LLC and Orion Advisor Solutions announced they have entered into an agreement that will provide Axxcess Advisors and Axxcess Platform TAMP partners with sleeve-level direct indexing and tax optimization through Orion’s custom indexing services.

Clients will be able to incorporate cost-efficient direct indexing strategies with the benefits of tax-efficient wealth management to complement adviser-directed and third-party SMA strategies available on the Axxcess Platform.

“Axxcess Platform’s ability to customize tax management for complex clients will further differentiate an advisors’ value proposition,” said Cory Persson, director of investments at Axxcess Wealth, in a statement. “Advisors and firms that outsource their wealth management operations to Axxcess’ third party money managers but want to develop their own advisor directed indexing strategies and allocation mandates can do so on a turnkey or client by client basis.”

BondBloxx Prtners With Northern Trust to Outsource Trading Operations

Northern Trust is providing outsourced trading services to BondBloxx Investment Management Corp., an issuer of precision fixed-income ETFs.

“Partnering with Northern Trust to outsource our trading operations has allowed us to quickly grow our business,” said Leland Clemons, BondBloxx’s founder, in a statement. “We have gained access to asset class and markets expertise without having to scale an internal trading infrastructure, which allows us to focus on enhancing the product mix and investment insights we offer to our clients.”

“Our partnership with BondBloxx has been highly effective, allowing them to improve their flexibility and liquidity while expanding access to markets, which is crucial to their growth trajectory,” said Stephanie Farrell, head of integrated trading solutions for the Americas at Northern Trust Securities Inc., in a statement.

Data & Research May 18, 2023

Schwab Sees Record Attendance in Participant 401(k) Sessions

Participants are favoring virtual sessions, and 18% boost their 401(k) contribution rate after 1:1 engagements.

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Retirement plan participants attended educational 401(k) plan sessions at record levels in 2022, driven in part by the use of virtual meetings, according to data released by The Charles Schwab Corp.’s retirement plan division on Wednesday.

Participant attendance was up by 5.4% year-over-year, with virtual live meetings accounting for 65% of attendance among over 1,600 education sessions run by Schwab educators. Twenty-eight percent of participants went to on-demand meetings made available from the sessions, according to the Westlake, Texas-based firm. 

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“We’ve seen growth in 2021, 2022 and, so far, more again this year,” says Marci Stewart, director of communication consulting and participant education for Schwab Workplace Financial Services.

Participant education and engagement have been key focuses for the retirement industry in recent years, with recordkeepers, advisory firms and third-party providers enhancing or offering new financial wellness tools and educational touchpoints. Schwab’s Stewart, who oversees the firm’s participant webcast series, says the pandemic pushed virtual platforms forward and made them more accepted. In 2022, more than 80% of retirement plan education sessions that Schwab held were virtual.

“I think the pandemic really forced everyone to experiment virtually, and it’s giving us the ability to reach more people,” Stewart says. This can be particularly important when discussing financial matters, she notes, including retirement planning. “Some employees don’t want to announce that they are getting ready for retirement, and the virtual experience gives them that anonymity, while also providing them the information they need,” she says.

While virtual meetings dominate, on-site educational sessions have also increased as the effects of the pandemic have waned, with 7.4% of workers attending in person, up from just 1% in 2021. Meanwhile, Schwab found that cancellations and reschedules were down by nearly 10% last year, compared to 2021.

Working With Advisers

Schwab, as a recordkeeper, provides participant education programs and guidance to help drive action, and can also facilitate the delivery of specific advice, or connect participants with plan advisers, Stewart says. Her team often works directly with a plan sponsor’s adviser to identify topic areas to focus on, and the team can co-present with advisers when applicable.

“The adviser can be a critical partner in helping us to think about a really good educational topic for that client’s employees,” she says.

More recently, Stewart’s team has started making sessions more conversational, facilitating live panel discussions and taking audience questions. Some of the sessions are focused on a single topic, such as saving for a child’s college education, and last no longer than 10 minutes, she says.

Popular sessions have included topics such as women and investing, which was the most-attended webcast topic in 2022. Other group-specific topics included investing trends in the Black community and financial essentials for the LGBTQ+ community, according to Schwab. The firm also launched a Spanish webcast hub last year with translated events and hosted live events in Spanish.

From Education to Action

The sessions do often lead to retirement saving action by participants, according to data collected by Schwab. One of the top actions participants took after a session and a 1:1 engagement was increasing their 401(k) contribution, with 18% of session attendees doing so in 2022, up from 11% in 2021.

In addition, more than 90% of session attendees agreed or strongly agreed that they felt better prepared to take the next financial step in their lives after attending virtual sessions, according to the firm.

Stewart notes that as the events grow in popularity, her team is finding ways to cater them to important areas for participants, such as paying off debt, raising “money-wise” children or supporting aging parents.

“People have competing priorities for the dollars they earn,” she says. “They don’t make a distinction between saving for retirement or other areas of their lives.”

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