The SECURE 2.0 Act of 2022 updated tax law to permit CITs into 403(b)s, but it did not update the necessary securities laws to do the same. Without both changes, CITs cannot be used in 403(b) plans. CITs are similar to mutual funds but, due to lower regulatory requirements, tend to have lower fees.
Lucas’ bill would specifically amend the Investment Company Act of 1940, the Securities and Exchange Act of 1934 and the Securities Act of 1933 to permit the use of CITs by 403(b) plans.
CITs and mutual funds are both pooled investment vehicles that follow stated investment objectives and strategies, but CITs are not subject to the prospectus and financial reporting requirements or the expense rules of securities laws.
The provisions of SECURE 2.0 that would have permitted CITs in 403(b)s originated in the House Committee on Ways and Means, but the House Committee on Financial Services asserted jurisdiction over the securities law aspect of the changes, and some committee members had concerns about the changes. Ultimately, there was not enough time to pass both sets of amendments before the new Congress was sworn in.
The Financial Services Committee chair is now Representative Patrick McHenry, R-North Carolina, which may improve the provisions’ odds of final passage, though the concept of harmonizing 403(b) and 401(a) plans has broad support.
David Ashner, an ERISA attorney with Groom Law Group, says the Lucas bill would update all three laws necessary to make this correction and allow CITs to be used by 403(b)s. He says “there is nothing missing here,” and the bill as written would complete a very popular objective of the SECURE 2.0 project that did not find its way into the December 2022 legislation.
Robert Abramowitz, a partner in the Morgan Lewis law firm, says updating all three acts would remove any ambiguity about whether CITs are permitted investment structures for use in 403(b) plans, and this should be the final act required.
403(b) plans are currently the only tax-preferred retirement plan that does not have access to CITs. Ashner says of the tax law changes that the “whole point of this is to get parity” between different defined contribution-style retirement plans.
Lucas’ office did not return a request for comment.
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Atria Wealth Solutions Announces Acquisition of Grove Point Financial
Atria Wealth Solutions Inc., a multi-channel wealth management holding company, announced its definitive agreement to acquire Grove Point Financial LLC.
Grove Point is an independent wealth management firm founded in 1984 as H. Beck Inc. and acquired by Kestra Holdings in 2017. Based in Rockville, Maryland, Grove Point serves approximately 400 independent financial professionals with $15 billion in client assets.
Upon closing, Atria’s subsidiaries will collectively represent nearly 2,700 financial professionals with approximately $115 billion in assets under administration.
“We are thrilled to join forces with Grove Point’s financial professionals, talented executive team and employees,” said Doug Ketterer, Atria’s CEO and founding partner, in a statement.
Pensionmark Acquires Xponential Growth Solutions
Financial advisory firm Pensionmark, a World Insurance Associates LLC company, announced it has acquired Xponential Growth Solutions.
XGS provides educational workshops, certified online courses, local training events and customized tools to improve retirement plan management. The firm serves retirement and benefit plan sponsors and fiduciaries, HR professionals and financial professionals.
“Our specialized product offering and commitment to service excellence are a great fit with Pensionmark,” said Jon Freye, managing director of XGS, in a statement. “We look forward to joining the team and delivering solutions that make a difference for our adviser network, their clients, and the plan sponsor community.”
Aristotle Completes Acquisition of Pacific Asset Management from Pacific Life
Aristotle Capital Management LLC announced it has completed the acquisition of Pacific Asset Management LLC, a leader in liquid credit investments, from Pacific Life Insurance Co.. Pacific Asset Management has officially been rebranded to Aristotle Pacific Capital LLC.
The acquisition added more than 50 professionals and approximately $22 billion in new assets to the Aristotle organization. Aristotle and its affiliates, including Aristotle Pacific, now have more than $77 billion in assets under management.
“The completion of this initiative is a significant step in Aristotle’s client-centric strategy, expanding our credit offerings and enabling us to offer a broader range of investment solutions to our clients,” said Richard Hollander, chairman of Aristotle, in a statement. “Our teams have proven throughout this process that they are client-focused and culturally aligned. We look forward to providing new opportunities to continue to meet our clients’ needs.”
Millennium Trust Acquires Provider of Real Estate 1031 Exchanges Accruit
Millennium Trust Company, LLC, completed the acquisition of Accruit Holdings LLC, an independent qualified intermediary and technology service provider of real estate 1031 exchanges.
The acquisition will give Millennium Trust’s clients access to facilitators of 1031 exchanges. The solution is one of the most popular, efficient tax-deferral strategies when selling and buying real estate property used for business or investment.
“More people are turning to alternative investments like real estate to grow their retirement savings and income, so 1031 exchanges are a valuable tool when managing wealth,” said Dan Laszlo, Millennium Trust’s CEO, in a statement. “We help people leverage their assets to invest in alternatives like real estate, and we’re excited about this step forward, pairing the highest level of administrative expertise and exceptional service with Accruit’s revolutionary 1031 exchange software technology.”
Silverberg Wealth Management Joins NWF Advisory Group
Silverberg Wealth Management has joined NWF Advisory Group LLC. Silverberg, featuring three former Cetera advisers, brings $212 million in client assets to the Advisor Group network.
Silverberg Wealth Management provides a range of wealth management services such as retirement planning, college savings, insurance and asset protection.
“We are thrilled to partner with NWF and look forward to all the benefits that being part of Advisor Group will bring to our business and our clients,” said Marcus Silverberg, president of Silverberg Wealth Management, in a statement. “When we decided to change firms, we had several compelling offers. After conducting our due diligence, we felt that NWF, with the backing of Advisor Group, was by far the best choice.”
Prospera Financial Services Inc., a boutique wealth management firm, announced its association with Howell Wealth Advisors.
Josh Howell, managing director, leads the two-member team, which oversees approximately $215 million in client assets and is based in Punta Gorda, Florida.
Howell has nearly 30 years of experience as a financial adviser. Howell and relationship manager Liz Fisher have joined Prospera and continue to serve clients across Southwestern Florida and beyond.
“Josh has built an incredible practice that provides clients with personalized services and support across generations of client families,” said Tarah Williams, Prospera’s president and COO, in a statement. “His firm fits perfectly into our boutique model and will benefit from our industry-leading fixed-income offerings and tailored adviser support.”
QA Wealth Management Joins CAPTRUST
CAPTRUST Financial Advisors LLC announced the addition of QA Wealth Management, a division of Quantitative Advantage LLC. The firm adds a total of 23 new colleagues to CAPTRUST and more than $770 million in advisory assets.
QA provides financial advice, planning and investment management for individuals, with a specialization in working with Big Four professionals. The firm was founded by John Wing in 2000 and today is led by CEO Dan Westin.
“We are thrilled to tap into the niche market of the Big Four partners that QA supports and to be building on our already significant presence in the Minneapolis region,” said Rush Benton, CAPTRUST’s senior director of strategic growth, in a statement.
