A new software solution
from RiXtrema addresses DOL fiduciary rule compliance for advisers finding themselves
on a new regulatory playing field when it comes to rollover recommendations.
RiXtrema, a company that provides risk management
tools and analysis to the financial advisory and broker/dealer community, announced the launch of its IRAFiduciaryOptimizer
tool to help financial advisers document clients’ best interests and ensure compliant rollovers.
According to the firm, the new fiduciary tool is “the first software to quantitatively
compare and convert existing retirement portfolios into proposed new, compliant
portfolios comprised of securities approved by the independent financial adviser
or broker/dealer.” The comparison highlights a variety of measures such as
fees, track record of the investments, risk versus risk tolerance, and best
fiduciary practices, RiXtrema explains.
“These might include investing in the best share class, as
well as additional services provided by the adviser to the client,” the firm
says.
The IRAFiduciaryOptimizer further produces a report
summarizing why a rollover is in the best interest of the client based on the
above-mentioned measures. Reports can be generated by individual advisers, or by
a home office compliance team using an administrator portal to manage outcomes for
all advisers/representatives with the firm.
RiXtreama adds that the service enables the adviser to
quantify and document any savings, performance improvements, fiduciary best
practices, as well as additional services available by switching from the
existing portfolio to a portfolio comprised of the adviser’s suggested
investments. Additionally, it allows the adviser to compare the risk/return
profile of the original portfolio with the rollover recommendation, as well as
show how it compares on metrics such as total fees, returns, risk, Sharpe ratio
and fiduciary best practices. The IRAFiduciaryOptimizer is also fully
integrated with the FinaMetrica risk tolerance system enabling compliance
groups to create risk-appropriate portfolios, while fulfilling other fiduciary
requirements.
The firm concludes that the IRAFiduciaryOptimizer can
support such compliance work both at the individual adviser level and for an
entire firm or broker/dealer, “with batch tools available to make thousands of
portfolios compliant in a single process along with producing documentation
that shows client’s best interest.”
More information about the fiduciary software solution is available
online here.
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Prudential Investments is
reducing expenses on a number of its mutual funds including the Prudential
Total Return Bond Fund with $17.1 billion in net assets. The firm says it’s
also reducing fees for the Prudential Global Total Return Fund.
“Our ongoing evaluation of expenses underscores our
commitment to delivering performance and value to shareholders,” says Stuart
Parker, president of Prudential Investments.
In the past five years, Prudential Investments has
administered several fee reductions, passing along $30.2 million in savings to investors
through August 31, 2016, the firm says.
The net operating expense is without dividend expenses
on short positions.
Prudential Investments is the mutual fund group of
PGIM, a global investment manager with more than $1 trillion in assets
under management (AUM) and the global investment management business of
Prudential Financial.
NEXT:
Beaumont Capital Management Releases Smart Beta Series
Beaumont
Capital Management Releases Smart Beta Series
Beaumont Capital Management (BCM), a provider of
ETF-based solutions, has launched its BCM Paradigm Series of smart beta funds.
The offering includes the BCM Paradigm Tactical Fixed Income fund and the BCM Paradigm
Tactical Factor Selection fund. Both aim for risk-adjusted return with downside
protection by using rules-based analysis of investor behavior and by detecting shifts
between “normal” and “volatile” markets.
BCM’s process involves evaluating relative and absolute
levels of ETF’s volatility before categorizing them as “normal” or “volatile.” The
normal candidates are then allocated based upon their relative attractiveness,
which leads to the construction of a portfolio seeking positive returns, while
minimizing volatility and drawdown, the firm says. The strategies’ quantitative
models analyze each ETF for inclusion in the portfolio daily and rebalances
typically occur weekly.
“Lots of smart beta, or
factor-based ETFs, have been launched recently, but few strategies, in our
opinion, seek to use these products in a constructive way,” says Eric Biegeleisen,
BCM’s director of Quantitative Research and portfolio manager of the Paradigm
strategies. “With Paradigm, we are striving to use smart beta to pursue alpha.”
BCM says its smart beta strategy is consistent with its philosophy to provide relative returns
during upmarkets while providing protection capabilities during market shifts.
“True to its name, the BCM Paradigm
Series seeks to identify subtle, but important changes in behaviors, to gain an
early indication of dramatic market shifts,” says Bob Peatman, BCM’s director
of National Sales. “We believe this approach is particularly relevant for all
types of investors in today’s complex and volatile markets. When used together,
the Paradigm strategies offer a portfolio solution that seeks to balance core
equity and fixed income needs for growth, with defensive versatility and
overall stability.”
Ivy Investment Management Company
has launched its first three Ivy NextShares as part of a planned lineup of
these exchange-traded managed funds.
“NextShares represent another step in our effort to
provide clients with unique, progressive investment products,” says Thomas W.
Butch, president and CEO of Ivy Distributors. “We are pleased to be one of the
first firms to bring them to market. Ivy NextShares offer the potential for
competitive investment returns by applying the strength of Ivy’s experienced
portfolio managers and proprietary investment research in a cost-effective and
tax-effective structure.”
The Ivy Energy NextShares invests at
least 80% of its net assets in securities of companies within all aspects of
the energy sector including exploration, discovery, production and distribution
or infrastructure of energy and/or alternative energy sources. The portfolio
typically will hold 50 to 65 stocks. It is managed by veteran portfolio manager
David P. Ginther, CPA, senior vice president of IICO, and Michael T. Wolverton,
CFA, vice president of IICO.
Ivy Focused Growth NextShares
will invest primarily in a portfolio of common stocks issued by large
capitalization, growth-oriented companies that the manager believes have the
ability to sustain growth for the long term. The portfolio typically will
maintain a limited number of stocks, generally 15 to 25, the firm says. It is
managed by veteran portfolio manager Daniel P. Becker, CFA, senior vice
president of IICO; and Bradley M. Klapmeyer, CFA, vice president of IICO.
Ivy Focused Value NextShares
is designed to invest primarily in the common stocks of companies that the
manager believes are undervalued, trading at a significant discount relative to
the intrinsic value of the company as estimated by IICO and/or are out of favor
in the financial markets, but have a favorable outlook for capital
appreciation. The portfolio typically will maintain a limited number of stocks,
generally 15 to 25. It will be managed by veteran portfolio manager Matthew T.
Norris, CFA, senior vice president of IICO.
“We congratulate Ivy on the launch of their three
NextShares funds,” says Stephen W. Clarke, president of NextShares Solutions,
LLC. “Ivy is leading the evolution of active fund investing to a potentially
better-performing, lower cost and more tax efficient structure.”
NextShares are currently available through online
brokerage services Folio Investing and Folio Institutional. Interactive Brokers
Group, an automated global electronic broker and market maker; and Envestnet, a
provider of unified wealth management technology and services, have both
announced their intentions to make NextShares available on their platforms in
the near term. In July 2016, UBS Financial Services announced plans to become
the first full-service wealth manager to offer NextShares through its financial
adviser network in early 2017.
NEXT:
RBC Correspondent Services Offers New ETF Model Portfolios from State
Street
RBC
Correspondent Services Offers New ETF Model Portfolios from State Street
State Street Global Advisors (SSGA) soon will make its
new suite of five risk-based, custom exchange-traded fund (ETF) models
available to clients of RBC Correspondent Services (RBC CS). The ETFs will be
delivered through NextCapital’s open-architecture digital advice
platform.
Each
model will contain eight to 12 SPDR ETFs with investment minimums of
$5,000. The custom model ETF portfolios are designed and maintained by SSGA’s
Investment Solutions Group, a team of more than 75 investment professionals
managing more than $180 billion in assets.
“The
robo-advisory landscape is quickly evolving, and we are thrilled to be leading
the effort to deliver innovative investment options to RBC’s correspondent firms,”
says Nick Good, co-head of the Global SPDR business at State Street Global
Advisors. “The combination of SSGA’s thought leadership in portfolio
construction and NextCapital’s market leading technology will deliver a
compelling and seamless user experience.”
The
model portfolios will consist of ETFs from the RBC CS No-Transaction Fee ETF
program.
Earlier this year, SSGA and RBC CS announced the launch of No-Transaction Fee
(NTF) ETF program, which allows correspondent firms to diversify their clients
into broad market segments.
“With
these new ETF portfolios available through NextCapital’s digital advice
platform, RBC CS firms will be able to offer personalized, managed accounts
with well diversified portfolios," said Dirk Quayle, president of
NextCapital.
SPDR
ETFs span an array of international and domestic asset classes. These are
managed by SSGA Funds Management, a registered investment adviser (RIA) and
wholly-owned subsidiary of State Street Corporation.
State
Street Global Advisors is the investment management arm of State Street
Corporation.
RBC
Correspondent Services is a clearing provider in the United
States specializing in providing clearing, custody and execution
services to independent broker dealers and their advisers.