Deals & People January 13, 2023

BlackRock Invests in Small Business 401(k) Provider Human Interest

BlackRock’s investment comes on the heels of retirement legislation designed to increase retirement plan coverage by small businesses.

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Global investment firm BlackRock said Friday it is investing in small business 401(k) provider Human Interest Inc., in a sign that the asset manager is interested in capturing a potential surge in small and medium-sized businesses offering retirement plans. The firms did not disclose the amount.

BlackRock is making a minority investment in the company and leading a financing round to support growth in the San Francisco-based recordkeeper’s defined contribution platform, according to a press release. New York-based BlackRock’s investment will go toward helping the business enhance its technology platform and advance its operational processes and infrastructure, while also sharing its “experience and expertise,” according to the release. 

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“Getting people on a path to a secure retirement is core to BlackRock’s purpose, from pioneering target-date funds 30 years ago to managing retirement assets for more than 40 million Americans today,” Anne Ackerley, head of BlackRock’s retirement group, said in the release. “We look forward to helping Human Interest close the access gap.”

BlackRock’s investment “reflects a continuation of BlackRock’s efforts to make strategic minority investments in companies that operate adjacently to our core business,” according to a spokesperson email.

The investment comes just weeks after the passage of the SECURE 2.0 Act of 2022, a series of retirement saving reforms targeted in large part at advancing new retirement plan creation through a combination of tax incentives and mandates in areas such as automatic enrollment. Many states, including California, Oregon, Connecticut and Massachusetts, already have mandates for employers to provide retirement benefits, either through a state-sponsored plan or other providers.

Human Interest, which was founded in 2015, said it has received $500 million in funding to date. The company touts itself as providing affordable, 401(k) and 403(b) plan services catered to small and medium-sized businesses unequipped to take on the many administrative and fiduciary burdens that come with offering a plan. The company said it has seen more than 400% growth in customers and revenue since its last financing round in 2021.

Human Interest has a host of competitors who also have recently discussed a sector surge. In interviews last month in PLANADVISER, small business 401(k) providers Vestwell, Ubiquity Retirement + Savings and Icon Savings Plan all discussed client growth in part due to market demand, state mandates and their low-cost models offering 3(38) investment and 3(16) administrative fiduciary services.

BlackRock’s defined contribution division, run by Ackerley, develops and distributes plan strategies and services for institutional as well as retail clients, reaching 65,000 plan and 35 million people, according to the company’s website. It also pioneered an in-plan target-date lifetime income strategy called LifePath Paycheck, which uses annuity contributions within retirement plans.

“We are excited to work with BlackRock to find ways to bring retirement within reach of millions of additional workers in the coming years,” Jeff Schneble, Human Interest’s CEO, said in the release.

The Markets January 13, 2023

Investment Service and Product Launches

Transamerica brings to market life insurance policy with guaranteed income option; J.P. Morgan app sends check deposits directly into IRAs; CAIA offers advisers digital assets online course; and more.

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Transamerica Adds Life Insurance Policy with Retirement Income Option

The Transamerica Corporation is offering a new index universal life insurance policy to protect beneficiaries with opportunity for tax-advantaged supplemental income in retirement, the insurance, retirement and investing firm announced in a press release.

The Transamerica Financial Choice IUL offers life insurance protection with index options and policy features with the goal of helping customers maximize accumulation potential and access to cash value, according to Baltimore-based Transamerica.

“The Transamerica Financial Choice IUL is designed for clients seeking protection and flexibility with tax-free supplemental income,” Andrew DeMarco, head of life solutions at Transamerica, said in the release. “This product delivers upside potential with downside protection for those customers who want to supplement their retirement income or diversify their tax liability.”

The announcement indicated the insurance policy can go toward replacing income, funding major expenses or leaving a financial legacy for heirs. The insurance protection also includes a generally tax-free death benefit and optional living benefit riders for qualifying critical, chronic and/or terminal illnesses.

The policy offers a mix of index options that provide choice and control for policyholders, according to the announcement. Purchasers can choose from domestic and global index options and high or uncapped index rates.

The product will also appeal to small business owners looking to fund or start a new venture, or those who use life insurance to support business-planning strategies such as deferred compensation, split dollar and executive bonus, according to Transamerica.

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J.P. Morgan Launches QuickDeposit to Send Checks Directly to IRAs

 J.P. Morgan Wealth Management has a new offering within the J.P. Morgan and Chase apps for customers to deposit checks—including 401(k) rollovers—directly into their individual retirement accounts from their phone, the New York-based wealth manager announced in a press release.

QuickDeposit for Investments is intended to add to the firm’s digital investment capabilities, with funds deposited within 24 hours of the check being scanned, according to the release. QuickDeposit for Investments is eligible for brokerage and managed accounts, as well as traditional and Roth. Clients can deposit up to $100,000 for taxable accounts and $500,000 for retirement accounts every 30 days, according to the announcement.

“QuickDeposit for banking has always been one of our most popular features,” Kristin Lemkau, CEO of U.S. wealth management for J.P. Morgan, said in the release. “Now we have that same capability for investments. Clients can deposit higher dollar checks right into their investment account quickly and safely.”

Chase has 62 million digitally active customers in the Chase Mobile app and at Chase.com, the release states.

Alternative Investment Association Offers Digital Assets Course

The Chartered Alternative Investment Analyst Association said it is offering a new online education platform focused on digital assets, the organization announced in a press release.

The Digital Assets Microcredential will be available on CAIA’s UniFi in the first half of 2023, according to the Amherst, Massachusetts-based association.

This microcredential, sponsored by digital assets company One River Asset Management, also known as One River Digital, will be earned by taking an online program of between four and five hours designed to provide wealth management professionals with foundational education on digital assets, the CAIA Association announcement said.

The curriculum will consist of four modules addressing: the fundamentals of digital assets; use cases of digital assets; investing in digital assets; and key questions and consideration including custody, compliance, access vehicles and regulation.

“It has now been more than a decade since digital assets emerged onto the scene as a topic of conversation, and a potential investment opportunity, for the wealth management industry,” Aaron Filbeck, managing director and head of UniFi by CAIA, said in the release. “While blockchain technology has the potential to bring significant innovation to many industries, including financial services, its applications are still developing. Therefore, balancing the risks with the investment opportunity set couldn’t be more important, as evidenced in the latter half of 2022.”

AE Wealth Rolls Out Riskalyze Platform to Financial Advisers

AE Wealth Management LLC, a registered investment advisory, announced it has partnered with wealth management platform provider Riskalyze on a new investing and analysis platform for its more than 1,000 financial advisers. 

Riskalyze Elite offers AE Wealth advisers a standard platform for acquiring new clients and engaging with them in a personalized way, increasing assets under management retention and firm growth, the Auburn, California-based Riskalyze stated in a press release.

Riskalyze Elite will include an adviser marketing kit, individual security analysis, detailed investment portfolio statistics and a timeline to build a workable financial plan, among other services, the firm said.

“As our business and advisers have grown over the past couple of years, we were looking for a streamlined solution to serve our advisers and their clients,“ Chris Radford, president of Topeka, Kansas-based AE Wealth Management, said in the release.

Milestone Money Starts Website Focused on Retirement Planning

Milestone Money LLC, a financial planning and investment management firm, launched a website for retirement and financial planning to and through retirement, the Chicago-based firm announced  in a press release.

Milestone Money, which was founded last year, provides retirement planning, financial planning and investment management to pre-retirees and retirees. The new website will provide informative guides and checklists on retirement management and resources on tax planning and investment topics, according to the release.

It will also be an ”easy-to-navigate site with helpful resources, expertise, and insights on financial topics about living your best life in retirement,” Randy Dippell, the founder of Milestone Money, said in the release.

Dippell previously founded LakeStar Wealth Management LLC, later known as Nestegg Advisory, in 2012, working with corporate executives and small business owners.

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