Products November 3, 2016

New Broadridge Offerings Aim at DOL Compliance

A new suite of technology driven solutions from Broadridge Financial Solutions seeks to solve pressing questions related to the Department of Labor conflict of interest reform. 
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Broadridge Financial Solutions announced a new suite of technology driven solutions to help the investment community solve several of the most pressing challenges associated with the upcoming U.S. Department of Labor (DOL) Conflict of Interest Rule.

The new offerings include DOL Fiduciary Solutions, DOL Customer Communications, and DOL Compliance Reporting. Each, according to Broadridge, can help firms “validate, communicate and comply with the new rules, which take effect April 10, 2017.”

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The firm, like many others, is arguing new the DOL rule is one of the biggest regulatory events facing the financial industry for decades. It will expand the definition of Employee Retirement Income Security Act (ERISA) fiduciary investment advice and apply a “best interest” standard to a much broader range of investment services, including retirement investment advice and certain individual retirement account (IRA) rollover recommendations.

“Forward thinking firms are using the new rule as an opportunity to further engage customers and deepen relationships through new technologies,” adds Andrew Besheer, product lead for the new suite of solutions. “Helping fiduciaries meet disclosure obligations can provide an additional communications touchpoint to add transparency and clarity to point-of-sale transactions, and strengthen customer relationships, while improving firm-wide operations.”

In terms of specific capabilities, Broadridge’s DOL Fiduciary Solutions, built on the firm’s FundPOINT data, can help financial advisers and firms make investment recommendations that meet fiduciary standards. Using the tool to evaluate and validate their mutual fund sell list, advisers can “see that the funds and share classes on broker/dealer and other distributor platforms are suitable for specific clients.” Additionally, firms can equip advisers with self-service tools to distribute contract, notification and disclosure documents, among other aggregation capabilities.

The second new component, Broadridge’s DOL Fiduciary Solutions tool, can help financial advisers and firms make investment recommendations that meet fiduciary standards. Using the tool to evaluate and validate their mutual fund sell list, advisers can see that the funds and share classes on broker/dealer and other distributor platforms are suitable for specific clients.

Finally, Broadridge’s DOL Customer Communications solution leverages Broadridge’s “existing communications connectivity across the breadth of the financial services industry to allow for composition, multi-channel print or digital delivery, as well as tracking and archival capabilities for compliance.”

More information is available at www.Broadridge.com/DOLFiduciaryRule. 

Products November 3, 2016

Investment Products and Service Launches

Vanguard Innovation Center to Open in 2017; and Morningstar Launches Open Indexes Project with Free Access to Global Equity Indexes.
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Vanguard Innovation Center to Open in 2017

Vanguard plans to launch a new operation dedicated to meeting the changing needs of its individual, financial adviser, and institutional clients. The Vanguard Innovation Center is scheduled to open during the second quarter of 2017 in Philadelphia’s business and academic center, within proximity to the region’s transportation hubs and Vanguard’s headquarters in Malvern, Pennsylvania.

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Vanguard envisions the Innovation Center as an entrepreneurial team of 20 crew members dedicated to “galvanizing existing innovation efforts and serving as a catalyst for new ideas and solutions.” The Center also aims to boost partnerships with other businesses and universities by sharing expertise from research to technology across industries.

Today, more than 90% of Vanguard’s interactions with its 20 million clients occur digitally. In May 2015, the firm launched Vanguard Personal Advisor Services—one of the industry’s first solutions combining robo-advisers based on computer modeling with the judgement of human advisers. 

“We are in the midst of a great technological revolution, from self-driving cars and package-delivering drones to smart phones and 3D-printers, that is changing the way we live, work, and, in Vanguard’s realm, invest. With a centralized, and centrally located, Innovation Center, Vanguard seeks to harness emerging technologies and new processes to create value for our clients by improving their investing experience and their investment outcomes,” says Vanguard CEO Bill McNabb.

NEXT: Morningstar Launches Open Indexes Project with Free Access to Global Equity Indexes

Morningstar Launches Open Indexes Project with Free Access to Global Equity Indexes

Independent investment research firm Morningstar has kicked off its Open Indexes Project, offering asset managers and other firms the option to benchmark their investments against more than 100 of the company’s global indexes for free.

The indexes include equity benchmarks across sectors, styles, and regions. Morningstar says participants will have access to price return, total return, net return, and month-end constituent data for all indexes included in the project.

The firm says the project’s goal is to lower costs for the industry and improve investor outcomes in light of rising costs linked to market-cap-weighted equity indexes.

"Fund investors today are paying substantially lower fees than when we opened our doors more than 30 years ago,” says Joe Mansueto, chairman and chief executive officer of Morningstar. “One industry cost that's moving in the opposite direction is the fee charged for indexes used to measure and compare relative investment performance. This benchmarking process is extremely important. But only a handful of index providers control the vast majority of the market, and those providers are using their power to dramatically increase fees."

The firm will now provide its advisers, asset owners, and others in the financial-services space with access to these indexes free of charge for benchmarking purposes.  

Morningstar Indexes include a range of traditional global equity, fixed income, and commodity indexes that are also combined to form a series of asset-allocation indexes. Morningstar also offers active equity indexes drawing on the company's equity, fund, and asset-allocation research. 

Morningstar Global Equity Indexes include traditional beta and strategic beta benchmarking. The indexes consist of style, sector, factor-based, dividend, analyst advantage, and global equity.

The company has also created the Open Indexes Project Advisory Council. The group includes 25 firms including Ariel Investments, Dodge & Cox, Eaton Vance Management, and Guggenheim Investments working together drive transparency and accessibility for equity index benchmarking. 

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