Displaying items by tag: retirement

LPL Financial recently announced that Financial House has joined its broker-dealer, RIA, and custodial platforms. LPL was able to lure Financial House from Lincoln Financial, where the team managed around $650 million in advisory, brokerage, and retirement assets. The Financial House team, which was based in Centreville, Delaware, includes partner advisors Joseph Biloon, Robert Griesemer, and Emily Woodson as well as advisors Joseph Blair, Leo Strine, and Gary Ulrich. According to Griesemer, the team left Lincoln because its business had model changed. He said the following in a statement, “Financial House was founded primarily as an insurance and planning firm, but that’s changed over the years. We now offer more comprehensive, complex investment strategies and planning, so working with an insurance-based partner no longer suited our business model.” He added, “At the end of the day, we recognized LPL would provide us with more independence and flexibility to grow our practice as we see fit.” According to Biloon, “Financial House expects LPL to provide it with opportunities to add advisors and potentially acquire other practices because of LPL’s access to retiring advisors who want to sell part or all of their business.”

Finsum:A $650 million team left Lincoln Financial for LPL due to its changing business model that no longer fit with Lincoln’s insurance-based model.

Asset managers and retirement plan advisers should be aware of how they are managing and presenting ESG funds. According to analysts at Fitch Ratings, recent regulatory actions are likely to continue into 2023. For instance, last week, Goldman Sachs paid the Securities and Exchange Commission $4 million to settle charges of failing to correctly incorporate ESG research into investment procedures and branding. In another example, on May 23, a BNY Mellon Investment Adviser paid a $1.5 million penalty for misstatements and omissions about ESG representation in mutual funds. In a press release on Tuesday, Fitch said “These types of charges are likely to continue as the SEC looks to crack down on greenwashing.” Fitch also noted that these types of charges can “lead to reputational damage that can weaken franchises, particularly if they occur repeatedly.” Earlier in the year, the SEC proposed updates to fund naming rules and a new mandatory disclosure related to ESG investment practices. Fitch said the agency’s actions have resulted in asset managers being more conservative regarding their ESG messaging.

Finsum:With regulatory actions on ESG greenwashing expected to continue, asset managers need to be more conservative with their ESG credentials.

According to findings from Janus Henderson Investors’ 2022 Retirement Confidence Report, self-directed investors appear to be tightening their budgets amid rising inflation and market volatility. The report found that 86% of survey respondents are concerned or very concerned about inflation and 79% are concerned or very concerned about the stock market. However, despite these concerns, only 13% of investors have moved money out of stocks or bonds and into cash. Instead, almost half of the respondents said they have reduced their spending or plan to reduce spending as a result of the financial markets and rising inflation. The report also noted that women reported greater concern about the stock market than men, but no gender-based difference was found regarding inflation. Another noteworthy finding from the report was that investors still in the workforce were more worried about the stock market and inflation compared to retirees. This can be attributed to the many uncertainties associated with how their household budgets could change in retirement.

Finsum:A recent report found that investors are tightening their budgets, but not moving to cash amid the current rising inflation and market volatility.

It appears that the Office of Management and Budget (OMB) has finished its review of a new rule on ESG investing in retirement plans. The regulation was submitted for review on October 6th to the White House’s OMB as “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights” in a “final rule stage.” “The rule implements Executive Order 13990 from January 20, 2021, titled Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis, and Executive Order 14030 from May 20, 2021, titled Climate-Related Financial Risks.” The rule was listed on the OMB’s review dashboard as of Friday but was removed over the weekend, suggesting that the review has now been completed. This means the Labor Department can now proceed with issuing the regulation.

Finsum:TheOffice of Management and Budget finished its review of a new rule on ESG investing in retirement plans which means that the Labor Department can now proceed with issuing the regulation. 

Two bills currently in Congress could expand a deferred annuity known as the Qualified Longevity Annuity Contract (QLAC). Both the House and Senate are working on retirement savings legislation that would increase the allowable size of QLACs, making them more attractive to middle-income retirees. QLACs work like any fixed annuity. They pay a steady monthly income, but payments are deferred until the holder is at least 75 years of age. This means that you can buy a QLAC for a lower initial investment than immediate annuities. However, you can invest no more than $135,000 or 25% of your total retirement account balance over your lifetime. A Senate bill called the Enhancing American Retirement Now (EARN) Act, would raise the maximum investment to $200,000 and eliminate the 25 percent threshold, while a House bill, called the Securing a Strong Retirement Act, or SECURE 2.0, would repeal the 25 percent limit. The Senate bill has bipartisan support and the House bill passed last Spring. It appears Congress is looking to build a market for these products by raising the cap on maximum investments.

Finsum: Both houses of Congress are working on legislation that would increase the appeal of a deferred annuity called the Qualified Longevity Annuity Contract.