February kicked off with a slew of new industry movements, including new Governing Board members at the SPARK Institute, an acquisition from Lovell Minnick Partners, and the latest releases of ETFs and model portfolios among top financial services firms.
The SPARK Institute announces Governing Board-elects
The SPARK Institute announced its Governing Board elections, with Kevin Collins, head of Retirement Plan Services at T. Rowe Price, being elected Chair. He will succeed out-going Chair Ralph Ferraro, head of Retirement Plan Services at Lincoln Financial.
“We are excited to welcome Kevin as our incoming Chair and deeply appreciate all the time and dedication Ralph has shown to the SPARK organization. During Ralph’s tenure as Chair that began in 2020, the SPARK Institute has achieved significant legislative and regulatory success – particularly with the passage of the most recent SECURE 2.0 Act,” says Tim Rouse, executive director of the SPARK Institute.
Incoming Chair Kevin Collins said, “I have worked closely with Ralph over the years and appreciate the work he has done to help build the organization. I am honored to now move into my new role as the Chair of the SPARK Governing Board and look forward to continuing SPARK’s tradition of advocacy for our industry.” Collins added, “In September, SPARK’s Advisory Board voted to expand our mission to include promotion of financial literacy for all Americans. I look forward to helping our organization take this and other challenges head on.”
Joseph Smolen, senior vice president of Core & Institutional Markets at Empower, has been elected vice chair and will support Collins in helping guide SPARK’s Governing Board. “I look forward to working with Kevin and contributing to the great work this organization does for our industry,” said Smolen.
The SPARK Institute is managed by a Governing Board of twelve firms represented by: Allspring Global Investments, Ameritas Life Insurance Corp, Ascensus, BlackRock, Corebridge, Empower, FIS Global, J.P. Morgan Asset Management, Lincoln Financial Group, PGIM, SS&C, and T. Rowe Price.
LMP acquires national retirement services firm
Lovell Minnick Partners (LMP) has signed a definitive agreement to acquire a majority stake in Definiti LLC.
Definiti is a national retirement services firm that supports more than 8,000 workplace organizations and 10,000 retirement plans across the U.S. This investment will enable Definiti to accelerate investments in client service, technology, innovation, and talent. Terms of the deal were not disclosed.
Founded in 2015, Definiti is a third-party administrator (TPA) that provides workplace organizations with retirement plan administration, recordkeeping and compliance services, as well as actuarial consulting and pension outsourcing. Definiti works with financial advisors, recordkeepers and other partners to help workplace organizations deliver innovative retirement solutions to their employees. The hundreds of retirement plan consultants, in-house actuarial consultants, ERISA attorneys and document specialists at Definiti help organizations manage their retirement plans and ensure they comply with regulatory and legislative requirements.
“LMP’s experience, network, history with accelerating M&A strategies and emphasis on client and high-touch services make them an ideal partner to support Definiti’s growth,” said Tom Gaillard, CEO of Definiti. “With LMP as our new partner, our clients and partners should remain assured that we will continue to invest in innovative solutions and client service. We’re confident that LMP understands our business and ecosystem and we look forward to advancing our initiatives alongside them in the years to come.”
“Our investment in Definiti is a testament to its strong reputation and ability to differentiate itself as a market leader,” said Steve Pierson, managing partner at LMP. “We look forward to partnering with Tom and the management team to extend Definiti’s reach, enhance its service capabilities, and aggressively pursue strategic acquisitions to complement its organic growth trajectory.”
The transaction is expected to close in the first quarter of 2023, subject to customary regulatory reviews and approvals. Waller Helms Advisors served as financial advisor to LMP, and Raymond James served as financial advisor to Definiti. Goodwin Procter served as legal advisor to LMP, and Nutter, McClennen & Fish LLP served as legal advisor to Definiti.
Morgan Stanley Investment Management launches new ETFs
Morgan Stanley Investment Management (MSIM) has launched an exchange-traded fund (ETF) platform with the listing of six Calvert ETFs on NYSE Arca.
The ETF product suite features Calvert Research and Management’s approach to responsible investing and offers investors access to four indexed environmental, social, governance (ESG) strategies and two active ESG strategies across a range of asset classes.
“The launch of MSIM’s ETF platform builds on our world class investment capabilities with a diverse set of investment vehicles that aim to provide strategic value for our clients,” said Dan Simkowitz, head of Morgan Stanley Investment Management. “This launch is the first step in MSIM’s development of a robust ETF platform that supports products across our businesses, asset classes, jurisdictions, and brands.”
The six new ETFs advised by MSIM include:
• Calvert US Large-Cap Diversity, Equity and Inclusion Index ETF (CDEI)
• Calvert Ultra-Short Investment Grade ETF (CVSB)
• Calvert US Large-Cap Core Responsible Index ETF (CVLC)
• Calvert International Responsible Index ETF (CVIE)
• Calvert US-Mid Cap Core Responsible Index ETF (CVMC)
• Calvert US Select Equity ETF (CVSE)
“Throughout Calvert’s forty-year history, its commitment to responsible investing and approach to stewardship has been the foundation of its comprehensive offerings for investors,” said Ted Eliopoulos, CEO and President of Calvert Research and Management. “These new ETFs will resonate strongly with investors who seek competitive investment results while promoting positive change and supporting companies that are leaders in improving long-term shareholder value and societal outcomes.”
About the strategies:
- The Calvert US Large-Cap Diversity, Equity and Inclusion Index ETF (CDEI) offers investors diversified exposure to U.S. companies that Calvert believes are successful at managing Diversity, Equity and Inclusion (“DEI”) issues. In further support of Morgan Stanley’s commitment to DEI, MSIM has committed to make an annual contribution to DEI initiatives or DEI-focused organizations in an amount equal to 0.02% of CDEI’s net annualized assets under management.
- The active equity ETF (CVSE) will focus on U.S. large-cap companies that Calvert believes are addressing global environmental or societal challenges or are leaders in managing financially material environmental or social factors.
- The active fixed income product (CVSB) will focus on investment grade debt issuers and the three index equity ETFs offer exposure to either U.S. large companies (CVLC), U.S. mid-cap companies (CVMC), or international companies (CVIE).
- All six ETFs seek to invest in companies that operate their businesses in a manner consistent with the Calvert Principles for Responsible Investment, a framework for considering ESG factors.
Capital Group releases a dozen model portfolios
Capital Group has launched 12 active-passive model portfolios featuring Capital Group as the strategist. The models will be comprised of American Funds’ actively managed mutual funds and passively managed exchange-traded funds (ETFs) from Vanguard, Schwab, and BlackRock. As the strategist, Capital Group will select the passive ETFs in each model and manage the allocations.
“As the needs of financial professionals and investors continue to evolve so has the way we think about delivering our investment solutions to them,” said Kris Spazafumo, head of portfolio solutions and services at Capital Group. “We know that financial professionals are increasingly creating active-passive portfolios for their clients because they want both a low-cost, tax-efficient portfolio with the potential for excess returns.”
The latest series of active-passive model portfolios from Capital Group – including growth, growth and income, preservation and income, and retirement income strategies – have been designed to help financial professionals balance the demands of investment management with the need to scale their businesses and deepen client relationships.
Spazafumo added, “These models were designed to allow financial professionals to scale their practice and free them up to spend more of their valuable time helping clients plan for their financial goals. Like our existing all-active models, the new active-passive portfolios will leverage Capital Group’s objective-based investment philosophy, which emphasizes a strategic approach to portfolio construction.”
The new models – nine of which will be core and three which will be retirement-income focused, include:
- Capital Group Active-Passive Global Growth Model
- Capital Group Active-Passive Growth Model
- Capital Group Active-Passive Moderate Growth Model
- Capital Group Active-Passive Growth and Income Model
- Capital Group Active-Passive Moderate Growth and Income Model
- Capital Group Active-Passive Conservative Growth and Income Model
- Capital Group Active-Passive Conservative Income and Growth Model
- Capital Group Active-Passive Conservative Income Model
- Capital Group Active-Passive Preservation Model
- Capital Group Active-Passive Retirement Income Model – Enhanced
- Capital Group Active-Passive Retirement Income Model – Moderate
- Capital Group Active-Passive Retirement Income Model – Conservative
AllianzIM unveils two additional Buffered ETFs
Allianz Investment Management LLC (AllianzIM), a wholly owned subsidiary of Allianz Life Insurance Company of North America (Allianz Life), is launching its February series of U.S. Large Cap Buffered Exchange-Traded Funds (ETFs). The series includes two ETFs with a 12-month Outcome Period: The AllianzIM U.S. Large Cap Buffer10 Feb ETF (NYSE Arca: FEBT) and the AllianzIM U.S. Large Cap Buffer20 Feb ETF (NYSE Arca: FEBW).
The February series is the latest expansion of AllianzIM’s U.S. Large Cap Buffered ETFs, offering investment professionals and investors access to new risk mitigation strategies as market uncertainty persists and fears of a recession mount in 2023. The ETF suite is designed to provide a downside Buffer of 10% or 20% against market drops, while allowing investors the opportunity to participate in the upside potential of the SPDR S&P 500 ETF Trust up to a stated Cap.
| Ticker | Reference Asset | Buffer1 | Cap1 | Outcome Period Start Date | Outcome Period End Date |
| FEBT AllianzIM U.S. Large Cap Buffer10 Feb ETF | SPDR S&P 500 ETF Trust | 10.00% Gross/ 9.26% Net | 19.79% Gross/ 19.05% Net | Feb. 1, 2023 | Jan. 31, 2024 |
| FEBW AllianzIM U.S. Large Cap Buffer20 Feb ETF | SPDR S&P 500 ETF Trust | 20.00% Gross/ 19.26% Net | 13.24% Gross/ 12.50% Net | Feb. 1, 2023 | Jan. 31, 2024 |
“Our Buffered ETFs make it easier for investors sitting on cash to get back into the market without jumping headfirst into the deep end,” says Johan Grahn, head ETF market strategist at AllianzIM. “Investors that are concerned about down-side risk in the US equity market have an opportunity to add a Buffered ETF allocation to their portfolios to provide explicit risk mitigation of either 10% or 20% while still participating in US equity returns up to a Cap if things turn out better than they expected.”
Offered at an expense ratio of 74 basis points (bps), AllianzIM’s extensive suite of Buffered ETFs is offered with six and 12-month Outcome Periods. The 12-month Outcome Period of the February series ETFs will be February 1, 2023, to January 31, 2024. Each Outcome Period reflects a new stated Cap commensurate with prevailing market conditions, allowing investors to remain invested with a level of risk mitigation.
eMoney Advisor launches 2023 tax planning features
eMoney Advisor (eMoney) is releasing new features that allow financial advisors to show their clients the impact Roth conversions and other tax strategies have on their financial plans.
These new features – a Tax Bracket Report and Automated Bracket-Based Roth Conversion—are tools that can be leveraged in theDecision Center,eMoney’s interactive cash flow-based planning experience.
The Tax Bracket Reportprovides advisors with the ability to demonstrate the impact of strategies like Roth conversions. The report overlays a client’s tax bracket floor with their annual income tax base and the taxable portion of any Roth conversion. It also includes further insight into what remains in the federal marginal bracket for each year, identifying new opportunities and topics for conversation.
To improve ease of use when modeling Roth conversions, a new conversion option is available to set up a target tax bracket. The Automated Bracket-Based Roth Conversionaccessible via the Fill Up Bracket option quickly converts assets until reaching the breakpoint between marginal tax brackets.
“These new capabilities easily enable advisors to have dynamic tax planning conversations with their clients, which are then brought to life in the Decision Center,” said Josh Belfiore, advisory product manager at eMoney. “These conversations are especially top-of-mind for advisors as they navigate the SECURE 2.0 Act changes.”
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