New products and changes introduced over the last week include a new type of target date funds from Northern Trust, the Fidelity Health Marketplace and a new commission structure from Franklin Square that results in lower fees. Also, Beaumont Capital launched a series of ETF-based retirement funds.
Here are the latest developments of interest to advisors:
1) Northern Trust Adds Life Engineered Funds
Northern Trust has launched Life Engineered Funds, which the firm describes as a re-engineering of the target date fund. The funds, which combine Northern Trust’s factor-based Engineered Equity strategies with PIMCO’s active fixed income and inflation-sensitive strategies, are collective trust funds maintained by Northern Trust Investments as trustee.
Life Engineered Funds are available to defined contribution retirement plan sponsors in 12 collective trust funds, designed for participants who are retired or are planning to retire between now and 2060. Each fund includes a combination of three distinct strategies: growth, income and inflation-sensitive.
2) Fidelity Adds Fidelity Health Marketplace
Fidelity Investments launched the Fidelity Health Marketplace, which provides access to health and wellness benefits to small- and mid-sized businesses and their employees.
Employers can choose from a network of national and regional medical, dental, vision and life benefits in addition to tax-savings options and access to wellness tools and programs for their employees.
The marketplace includes a decision-support tool to help employees select benefits and integrates with Fidelity NetBenefits, allowing employees access to all of their health and financial benefits, including the Fidelity Health Savings Account.
3) Franklin Square Changes Commission Structure
Franklin Square Capital Partners introduced a commission structure for nontraded alternative investments that it says will reduce fees and seek to align the interests of investors, advisors, regulators and sponsors.
Its T-share class is a response to FINRA Regulatory Notice 15-02, which builds on NASD Rule 2340 regarding direct participation program and unlisted real estate investment trust securities. The T-share class lowers the fees investors are charged both upfront and in total over the life of the investment and incorporates financing by Franklin Square of a portion of the upfront commission. That will reduce the financial impact for investors at time of sale.
4) Beaumont Capital Launches ETF-Based Retirement Funds
Beaumont Capital Management introduced a series of ETF-based, risk-managed funds that resemble target date funds and are intended as qualified default investment alternatives in retirement plans. The BCM DynamicBelay QDIAs cover years 2020 through 2060, in 10-year intervals. Beaumont Capital says allocations are “adjusted over longer periods the way most investment advisors would manage a portfolio, rather than [with] small annual adjustments,” which is how most target date funds are managed.