Products June 25, 2020

Investment Product and Service Launches

Calvert launches institute for responsible investing; BNY Mellon and Wilshire Associates create TDF platform; and intellicents to use Morningstar managed account service.

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Art by Jackson Epstein

Art by Jackson Epstein

Calvert Launches Institute for Responsible Investing

Calvert Research and Management, a subsidiary of Eaton Vance Corp., has launched the Calvert Institute for Responsible Investing. 

The Calvert Institute will partner with leading academic organizations, industry groups and other investors to create and sponsor third-party research focused on environmental, social and governance (ESG) issues of concern to responsible investors. 

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“For many years, Calvert has been a global leader in responsible investing and a catalyst for positive change through our research and engagement efforts,” says John Streur, president and chief executive officer. “By creating the Calvert Institute, we broaden the scope of our mission and programs in support of responsible investors and society as a whole.”

The Calvert Institute will continue Calvert’s practice of working with academic professionals and supporting research done at academic institutions, governance organizations and specialist research firms. Current research projects include exploring and assessing forms of corporate governance, human capital management, inequality and the financial materiality of gender and racial diversity, ESG integration, public finance, sustainable practices and the global energy transition.  

“We are thrilled to have this opportunity to contribute to the further development of responsible investing,” says Anne Matusewicz, a director of the Calvert Institute. “We want to help investors understand the role they can play in promoting positive change. Examining race and injustice, climate change and other critical issues will allow us to amplify voices that challenge the status quo based on research results and educate individuals and institutions at various stages of their responsible investment journey.”

BNY Mellon and Wilshire Associates Create TDF Platform

BNY Mellon Investment Management has partnered with Wilshire Associates to launch the BNY Mellon Investment Management Custom Target Date Builder. 

“The BNY Mellon Investment Management Custom Target Date Builder platform is a game-changer for advisers and builds on BNY Mellon Investment Management’s efforts to evolve our business, such as the Dreyfus rebrand in 2019, introducing certain zero-fee ETF [exchange-traded fund] funds and an expanded OCIO [outsourced chief investment officer] offering to investors and institutions in 2020,” says Andy Provencher, head of North America Distribution, BNY Mellon Investment Management. “This new platform is a further testament to our commitment to the DCIO [defined contribution investment only] market and provides advisers with greater target-date fund [TDF] choice.” 

The platform will offer reduced liability for plan sponsors; diminished investment manager and longevity risk for participants; price leveraging the efficiencies of the BNY Mellon adviser distribution and Wilshire’s investment and research capabilities; and plan-level customization for participants with the potential for better outcomes.

“The availability of this innovative new tool arrives at a befitting time when we are seeing increasing demand for target-date funds from plan sponsors as a default 401(k) investment option and the embrace of CITs [collective investment trusts] in DC [defined contribution] and DB [defined benefit] plans with their lower costs, greater flexibility and fewer regulatory/administrative requirements,” says Jason Schwarz, chief operating officer (COO), Wilshire Associates. “Our partnership with BNY Mellon Investment Management is altering the custom target date universe where plan sponsors had off-the-shelf target date options from a few dominant asset managers and now they have the same variety and richness of institutional investment options large plans have accessed to customize to their exact specifications.”

intellicents to Use Morningstar Managed Account Service

intellicents has announced it will begin using Morningstar Investment Management’s adviser managed accounts service to power the intellicents bioni(k) managed account solution.

“We believe managed accounts are the natural evolution of in-plan investment advice for 401(k) and 403(b) plans,” comments Brad Arends, co-founder and CEO of intellicents. “No longer should investment decisions get made solely based on age. Should all 40-year old participants in a plan be invested exactly the same way? Target-date funds [TDFs] once made sense, but technology today provides a smarter way.”

That “smarter way” goes well beyond age as the single variable for investment strategy. “Finally, a goals-based financial planning approach to managing a participant’s investments, and it’s integrated with many recordkeeping platforms,” adds Grant Arends, co-founder and president of intellicents. “The Morningstar Investment Management technology can take into account dozens of separate variables to look at the participant as a whole. Together with our intellicents professionals, bioni(k) can advise them on their contributions, investment allocations, retirement age and Social Security start date. It’s a perfect complement to our message of financial planning as the key to a successful worksite financial wellness program.”

Compliance June 24, 2020

IRS Actively Seeking Out CARES Act Fraudsters

Officials say criminals have already gotten millions in PPP loans and unemployment insurance.

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The Internal Revenue Service (IRS) is actively seeking out people who are trying to illegally obtain funds from the Coronavirus Aid, Relief and Economic Security (CARES) Act, IRS officials said Tuesday during a webinar sponsored by the CPA Academy, titled, “CARES Act Enforcement: What Can We Expect from the IRS?”

As Michael Batdorf, executive director of refund and cybercrimes at the IRS, said, “Even if only 1% of the applications are fraudulent, that is 1% of $600 billion, which is $6 billion. There are always criminals looking to exploit any difficult situation. We want to warn taxpayers about the potential fraud.”

Some criminals are using fake URLs that appear to be from the IRS and phishing attempts to get money from taxpayers, Batdorf said. The IRS also noticed early fraudulent attempts to get Paycheck Protection Program (PPP) loans, he said.

“One of the earliest was out of Rhode Island,” Batdorf said. “There was no company. It was a completely false application for a $500,000 loan. Then there was one out of Norfolk, Virginia. It was a completely false loan application, but they managed to receive $150,000. There have been millions of dollars lost around the country.”

Then there are those fraudsters who steal people’s identification to file false unemployment claims, he added. “They are clogging the system with stolen IDs,” he said. “It is affecting almost every state.”

Nikki Johnson, director, collection policy, said the IRS is “balancing the need to dispense funds to those who are eligible with finding those who are fraudulent. We will whittle out those who are not legitimate. We are carefully reviewing every Form 7200, advanced payment of employer credits due to COVID-19, to ensure there is no ID fraud.”

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John Hinding, director, cross border activities at the IRS, added, “We are going through the Form 7200s. We may come across a brand new company with no employees. It is pretty easy to see that it is a fraudulent application. We have a decent amount of those. Some are honest mistakes.”

Johnson said the IRS has been careful to assign “highly skilled employees to review these forms because it is a new process. They are skilled at investigating compliance cases and determining when something appears to be suspicious.”

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