They’re watching

Meaning mediablog.com, which reported a few ways it picked up on the radar on companies tweaking their ESG messaging in various publicity pieces this month. 

There’s a focus on the “E” in ESG; namely, increasingly, Americans are fretting over and more engaged with global warming

The “S”? No less important, especially if you have a soft spot for “great” community outreach programs and the money set aside toward it. 

Meantime, 94% of people didn’t believe enough had been done to advance the cause of sustainability and social issues, according to a recent global study from Oracle.

Now, in the landscape of success breeds success, the second edition of the “ESG and Green Finance Opportunities Forum” by The Chamber of Hong Kong Listed Companies will take place on Oct.  27, according to finance.yahoo.com.

That comes in the aftermath of last year’s inaugural event. The theme for this year’s is Navigating Climate Risk and Financing Climate Actions.

Confirmed to deliver the opening address is Financial Secretary Paul Chan Mo-po. A luncheon speech will be given by Secretary for Environment and Ecology Tse Chin-wan. 

A form reviewer at the Securities and Exchange Commission recently said he wants to make sure life insurers give investors a clear picture of how their registered index-linked annuity (RILA) contracts work. RILAs are annuity contracts that can expose the holder to the risk of investment-related loss of principal, but that tie crediting rates at least partly to the performance of investment indexes, rather than to the performance of funds that resemble mutual funds. At the Life Insurance Products Conference, held recently in Washington, D.C., Michael Kosoff, an attorney on the staff of the SEC’s Division of Investment Management, stated that he wants one strategy to be available throughout the life of the contract. He also wants to require issuers to disclose maximum losses. Essentially, the SEC wants life insurance company clients to say which crediting strategy the clients' guarantee will be available for the life of a RILA contract. A crediting strategy includes a reference to a particular index such as the S&P 500. Kosoff’s concern is that many issuers have a provision stating, “After the first year, we can terminate any and all options currently available. So, in essence, after year one, investors have no idea what they’re getting.”

Finsum:Due toconcerns over changing crediting changes in registered index-linked annuities, an SEC form reviewer stated that he wants one strategy to be available throughout the life of the contract.

According to a Bloomberg News survey of terminal and Bloomberg.com readers, sixty-five percent of the respondents expect ESG funds to trail the broader market in 2023. Out of the 691 survey respondents, 264 expect ESG funds to “slightly underperform,” while 184 are predicting they’ll “significantly underperform.” Of those 691 respondents, 235 identified themselves as being directly involved in ESG investing, and of this group, a little more than half said they expect the funds to “slightly” or “significantly” underperform. Fionna Ross of Edinburgh-based fund manager Abrdn Plc told Bloomberg, “Given the challenges of 2022, there will be some recovery next year, but it will remain mixed” because of inflation and other overhanging economic hurdles." While data shows that the average equity fund adhering to ESG factors lost slightly less money this year than products that track traditional broader market indexes such as the S&P 500, ESG funds have outperformed over a longer period. According to researchers at Morningstar, about 56% of U.S. sustainable funds beat rival category groups in the three-year period that ended on Sept. 30th.

Finsum:Based on the results of a recent Bloomberg survey, 65% of respondents believe that ESG funds will underperform the broader market in 2023. 

Altruist recently announced that it is adding unified managed accounts to its portfolio management capabilities. Altruist is a fintech company that offers a next-generation custodial solution built for independent financial advisors and their clients that combines software to manage a portfolio with and a powerful brokerage platform to invest. The new UMA capabilities will allow advisors to now mix and match models to create core-satellite or best-of-breed portfolios. The new feature will allow advisors to access third-party investment models from top asset managers through the firm’s Model Marketplace to create individual portfolios that meet clients’ investing goals. Advisors will also be able to include their own custom models as building blocks for client portfolios. The company launched its Model Marketplace in February 2021 featuring its own investment models, the Simplicity Series, as well as models from Vanguard and Dimensional Fund Advisors. Models from BlackRock, Redwood Investment Management, and State Street Global Advisors were added later on.

Finsum:Fintech firm Altruist announced the addition of UMAs to its model marketplace to allow advisors to mix and match models to create portfolios.

Skience, a leading financial services solution and consulting provider, recently announced an integration with CapitalROCK’s RightBRIDGE Best Interest Validation System. Skience offers consulting services and an award-winning platform that provides wealth management firms and RIAs with an efficient way to unify their technology. CapitalROCK, the makers of RightBRIDGE, provides financial services firms with a powerful and configurable rules engine to determine and document the best interest status of proposed rollovers, account types, and products. RightBRIDGE uses a scoring engine and ReasonText™ that explains why a recommendation fits a client’s needs and the licensing firm’s best interest requirements. By adding this integration, Skience will be able to provide advisors with an easy way to integrate Regulation Best Interest into their workflow process with a click of a button. The data can be used to update Skience records and be leveraged by Skience’s suitability checks as Skience’s client and household data will be prefilled into RightBRIDGE. The announcement comes as Robert Cook, FINRA Chief recently noted that more Reg BI-related enforcement cases are in the pipeline.

Finsum:Financial services platform Skience announced that it will be integrating with CapitalROCK’s RightBRIDGE solution that helps advisors meet Reg BI standards.