Product & Service Launches – 8/15/24

SEI launches direct indexing investment strategies; small business retirement plan provider Ubiquity teams with bookkeeping firm Bench Accounting; Franklin Templeton adds equity SMA Models on Orion's Platforms; and more.

SEI Launches Direct Index and Factor Investment Strategies

SEI Investments Co. announced additional investment strategies to its separately managed account and unified MA solutions offered through its managed account solutions program.

The new strategies include the launch of fixed-income-based direct indexing investment strategies that add to SEI’s existing lineup of individual bond strategies. It also includes dividend-focused equity options delivered through SEI’s SMA capabilities in direct indexing and factor investing.

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The additions have been made with the goal of giving more customized choice to advisers for their “client recommendations, empowered by SEI’s conviction,” said Jim Smigiel, chief investment officer and head of SEI’s investment management unit, in a statement. “SMAs and UMAs provide flexibility and tax-optimization, and as adoption increases, we continue to deliver optionality.”

The new strategies are intended to help advisers with mass-affluent, high-net-worth and ultra-high-net-worth investors. Additions include:

  • Systematic U.S. aggregate bond core strategy: provides exposure to the U.S. aggregate fixed-income market, while seeking to provide an overall risk-factor exposure similar to that of the benchmark index;
  • Systematic municipal bond core strategy: provides exposure to the intermediate municipal bond market, while seeking to provide an overall risk-factor exposure similar to that of the benchmark index;
  • Systematic U.S. dividend yield core strategy: seeks to provide a return similar to that of a dividend yield-focused index and consists of U.S. stocks included within the index that are screened for consistent records of high dividend payments and the ability to sustain them in the future; and
  • S. dividend yield (multi-factor SMA) strategy: uses a quantitative-based, active investment process—delivered through an enhanced dividend yield factor—that seeks to deliver income without sacrificing long-term capital appreciation through the purchase of high dividend-paying U.S. large-capitalization stocks.

The moves were made after client input and guidance, according to SEI’s announcement.

Franklin Templeton Adds Equity SMA Models on Orion’s Platforms

Franklin Templeton is offering its equity separately managed account models to advisers on platforms at Orion Advisor Solutions, the firms announced in a joint press release.

The arrangement will provide access to Franklin Templeton’s diversified SMA product suite to advisers who use those investment models in managing their investors’ accounts on the Orion Communities and Orion Portfolio Solutions platforms.

The relationships puts Franklin’s SMA models onto Orion’s platforms, which reach more than 6 million technology accounts and thousands of independent advisory firms, according to the company. Orion is a turnkey asset management program platform with open architecture infrastructure for investment offerings and management.

“This launch [with Franklin Templeton] underscores our commitment to expanding our reach within the advisor community by making our SMA models available on the platforms with which advisors are actively engaging,” said Sam Marciano, head of SMA distribution at Franklin Templeton, in a statement.

Franklin Templeton has more than $137 billion in SMA assets under management.

Ubiquity, Bench Accounting Form Strategic Partnership

Ubiquity Retirement + Savings and bookkeeping service provider Bench Accounting Inc. announced a strategic partnership to offer clients their combined defined contribution retirement plan offerings and bookkeeping services.

The partnership is geared toward small businesses to leverage Ubiquity’s retirement plan services and Bench Accounting’s financial management. Ubiquity, started in 1999, was one of the first digital 401(k) providers and has worked with more than 16,000 business clients. Bench, founded in 2012, has worked with thousands of small businesses on their bookkeeping, including financial insights and guidance.

“Bench’s accounting expertise complements Ubiquity’s retirement offerings,” said

Todd Daum, Bench’s chief revenue officer, in a statement. “This collaboration empowers owners to make informed decisions about their company’s finances while also prioritizing their employees’ long-term financial well-being.”

TIAA Revamps Plan Sponsor Administration Platform

TIAA has launched changes to refresh and simplify its plan sponsor retirement administration website, according to a spokesperson.

The website, PlanFocus, has new features, including access to TIAA’s SmartPlan, which gives details on participant behavior and plan outcomes and includes the ability to see employee salary bands, career stage and gender.

Other enhancements include:

  • Participant services: this section of the website now features specific categories and activities related to participant requests, enrollment, and TIAA’s Compliance Coordinator;
  • Streamlined navigation: a redesigned homepage for users to see items that need immediate attention;
  • Reports: all institutional reports, including multivendor reports (if applicable), are organized in one section; and
  • Mobile capabilities: the homepage is now mobile responsive, making it easier to navigate in different device types and screen resolution sizes.

          Correction: This article clarifies the latest enhancements to TIAA’s plan sponsor platform.

          JP Morgan Launches TDF With Guaranteed Income Annuity

          The asset manager joins other large financial firms targeting the market for pension-like retirement saving in DC plans.

          J.P. Morgan Asset Management announced on Thursday a retirement income investment leveraging a target-date fund with a guaranteed annuity payout in retirement.

          The firm’s SmartRetirement Lifetime Income TDF is designed to provide a stream of income payments in retirement through annuities from participating insurance companies, according to the announcement.

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          Equitable and Prudential are expected insurers for the product, which will be supported by multiple insurers and use “familiar target-date funds and then transition to a personalized retirement income strategy,” according to the announcement. The firm is in “active dialogues” with potential plan sponsors but has none signed up currently for the product, according to a spokesperson.

          J.P. Morgan’s entrance into the in-plan annuity market via a TDF marks another major financial firm targeting the market for a pension-like setup for defined contribution retirement plans. Other firms with annuity-backed products in the market range from asset manager AllianceBernstein LP to BlackRock Inc. and State Street Global Advisors and TIAA’s Nuveen Investments.

          J.P. Morgan has built its SmartRetirement Lifetime Income to “minimize recordkeeper requirements,” according to the spokesperson.

          “Retirement savers want a solution that turns complexity into clarity, allowing them to have the certainty of a source of income they cannot outlive, without giving up control of their savings,” said Steve Rubino, head of retirement for J.P. Morgan Asset Management, in a statement.

          According to J.P. Morgan’s announcement, the lifetime income feature would allow electing participants to draw down a stable value balance over an expected time horizon that correlates with their average life expectancy, with annuity income coming directly from the supporting insurers.

          Equitable’s likely partnership on the product with J.P. Morgan adds to annuity-backing the firm has with BlackRock and AllianceBernstein’s in-plan annuity offerings. The firm’s goal is to be a major player and “thought leader” in the in-plan guaranteed space as it has the “knowledge and wherewithal to work with asset managers,” says Keith Naimot, head of institutional markets for Equitable.

          The other reason, he says, is to expand guaranteed income options to savers within the DC space.

          “This leverages our skillset in a way that delivers for the American people the opportunity to take advantage of guaranteed income that has really only been possible in the IRA market or nonqualified market until fairly recently,” he says. “It gives us the ability to reach more folks early on than we would have if we were solely looking at it from the retail space.”

          With the new offering, participants will get the protection of stable value that bond investments may typically give in the TDF glidepath, but with any offsets in gains being made up for with the pension-like guarantee of retirement income, notes Namiot of Equitable.

          “In the old days many people had defined benefit plans and that provided them with a stable income in addition to Social Security,” he says. “That guaranteed component of retirement has been in decline and we are collectively—as insurers and asset managers—trying to bring that back.”

          Rob Massa, a plan adviser and the managing director and Houston market retirement practice leader for Prime Capital Retirement, says benchmarking the various products currently in market is one of the challenges in assessing the option, as “there isn’t a lot of data to work with.”

          When talking with plan sponsors about these options, Massa says he focuses on education components such as what retirement income is as compared with lifetime income, the pros and cons of offering income options and fiduciary considerations, among others.

          “It’s a daunting agenda, really,” says Massa. “Yet, this is what you need to cover just to educate your plan fiduciaries enough to be able to have an informed conversation about in-plan income solutions.”

          In terms of reviewing the product offerings, Massa says he uses some of Morningstar’s requirements, as well as in-plan income certification program guidelines laid out by the National Association of Plan Advisors. He then integrates those into a “more standard fiduciary processes we might use when conducting” a TDF request for proposal.

          Assessment of offering such a product for a plan sponsor should consider factors including the participant pool demographics, risks or problems the solution is trying to solve for, and a cost-benefit analysis to compare the solutions versus other, more traditional options, Massa says.

          The product was designed by the J.P. Morgan team that oversees the firm’s SmartRetirement Target Date Funds, including Daniel Oldroyd and Daniel Yem, both portfolio managers in the target-date and retirement income fields, according to the announcement.

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