The Markets October 26, 2011

Plan Sponsors Predict Demand for SRI Will Increase

A recent study found that the number of defined contribution (DC) plans in the U.S. offering a sustainable and responsible investing (SRI) choice could double in the next two to three years.
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The joint U.S. SIF and Mercer study, “Opportunities for Sustainable and Responsible Investing in U.S. Defined Contribution Plans,” explains that 14% of DC plan sponsors responding to a survey already offer one or more SRI options, while an additional 13% of survey respondents are either discussing adding an SRI option or intend to do so in the next two to three years. More than four out of five plan sponsors (84%) — both those that currently offer SRI options and those that do not — predict that demand for SRI options in retirement plans will increase or remain steady over the next five years. 

For those sponsors that currently offer SRI options, the primary reasons for doing so are to align their plans with their organizational missions and to meet employee demand. However, more than 70% of respondents that do not offer such options say they believe that SRI options have never been requested by participants. (The survey did not ask plan sponsors whether they had a formal way to elicit or track participants’ potential interest in SRI or other options.)  

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A small subset of respondents say they do not offer SRI options but have received participant requests for them. These plan sponsors say the primary reason they have not added SRI options—cited by just under one-quarter of the subset—was that the requests from participants have not reached a sufficient level. Somewhat lesser concerns—cited by under one-fifth of this group—were questions about fiduciary duty and financial performance.  

Whether a plan sponsor offers SRI options bears little correlation to the plan’s size, either by value of assets or number of participants. Rather, it appears that SRI options are most likely to exist where the philosophy is aligned with an organization’s objectives and culture. SRI options are more likely to be found in the plans of non-profit, mission-based or public organizations than in corporations. 

Additionally, nearly three in five respondents (58%) say they have minimal or no understanding of SRI investment products and indices.    

The survey report can be found at http://www.ussif.org/resources/pubs/.
Products October 26, 2011

Pershing Expands Open-Architecture Trust Platform

Pershing LLC, a BNY Mellon company, has enhanced its open-architecture platform with the additions of Comerica Bank & Trust, NA and New York Private Trust Company.   
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Pershing’s open-architecture platform, named Trust Network, enables its broker/dealer and independent registered investment adviser (RIA) customers to offer their clients a range of personal trust services and solutions.

“Investment professionals and advisers who serve sophisticated clients need the flexibility to offer the trust administration provider that can best support their business objectives and clients’ needs,” said Katie Swain, director of product management and development for Pershing. “The additions of Comerica and New York Private Trust Company expand our extensive suite of wealth management solutions and provide our customers with best of breed choices for serving their clients.”

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Comerica Bank & Trust, NA, a subsidiary of Comerica Incorporated, has over $100 billion in trust and custody assets. Comerica provides a variety of personal trust services including estate settlement, trust administration, closely-held business management, and real estate management. New York Private Trust Company is a Delaware-chartered trust company providing fiduciary services to investment advisers and other institutions lacking trust powers throughout the U.S.

Pershing’s Trust Network includes full trustee services and administrative trustee services. The platform enables Pershing’s customers to perform investment management activities for their clients’ trust accounts with all related assets held in custody at Pershing. Trust Network is available to Pershing’s introducing broker/dealer customers through Pershing LLC and RIAs via Pershing’s affiliate, Pershing Advisor Solutions LLC.

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