Products February 15, 2018

Investment Products and Services Launches

EPIC incorporates StoryLine to platform; Sterling Capital adds R6 share class to select mutual funds; and PAAMCO launches alternative beta tool.

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EPIC Incorporates StoryLine to Platform

Stadion Money Management, provider of participant level, customized retirement solutions, announced that EPIC Advisors added StoryLine, Stadion’s 401(k) managed account solution, to its retirement platform.

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StoryLine, built with SPDR ETFs, is a retirement planning solution built specifically for 401(k) participants in adviser-sold plans. StoryLine offers plan level customization with the option of participant level customization, which Stadion sees as a distinct improvement over “one size fits all” target-date strategies.

Through StoryLine’s participant-centric web interface, employees will be encouraged to define their individual investment paths based on personal risk profiles, expectations, and goals. StoryLine will also allow— at the employee’s discretion—the inclusion of outside assets to facilitate more comprehensive retirement planning. The end goal of this is to have each participant on a retirement path personalized to their own circumstances and needs.

“StoryLine has made significant inroads in the delivery of participant-friendly, customized retirement planning, a much-needed solution given the potential retirement savings gap facing many Americans,” says Manny Marques, president of EPIC. 

StoryLine helps financial advisers deepen their relationships with sponsors and participants by engaging them at the plan level with tailored solutions. In turn, sponsors are able to offer their employees access to individual personalized planning that goes beyond typical age- and risk-based investment strategies.

Sterling Capital Adds R6 Share Class to Select Mutual Funds

Sterling Capital Management LLC announced that its Capital Funds have added the R6 share class for seven of its mutual funds, which offers eligible clients a share class without shareholder servicing fees or sales charges. In addition to the R6 share class, all 25 Sterling Capital mutual funds are available in A, C and Institutional share classes.

As of February 1, 2018, the R6 share class is available for the following mutual funds:

  • Sterling Capital Behavioral Large Cap Value Equity Fund (STRAX)
  • Sterling Capital Behavioral Small Cap Value Equity Fund (STRBX)
  • Sterling Capital Behavioral International Equity Fund (STRCX)
  • Sterling Capital Equity Income Fund (STREX)
  • Sterling Capital Special Opportunities Fund (STRSX)
  • Sterling Capital Mid Value Fund (STRMX)
  • Sterling Capital Total Return Bond Fund (STRDX)

“We are very excited about launching our R6 share class,” says John W. McAuley, CIMA, head of Sales and Client Service. “We look forward to bringing this new investment option to market within the defined contribution space.”

This new share class is available to eligible employer-sponsored retirement plans such as 401(k) plans, 457(b) plans, 403(b) plans, profit-sharing plans and money purchase pension plans, defined benefit (DB) plans, and nonqualified deferred compensation (NQDC) plans.

PAAMCO Launches Alternative Beta Tool

Pacific Alternative Asset Management Company, LLC (PAAMCO) launched PAAMCO Alternative Beta, the latest tool in the firm’s suite of institutional liquid alpha solutions.

PAAMCO Alternative Beta offers a portfolio of alternative risk premia diversified across strategies, asset classes and implementations.  It aims to have little directionality to traditional markets at a lower cost than traditional hedge fund investments.

Lisa Fridman, CFA, CQF and Philippe Jorion, PhD are co-heads of PAAMCO Alt Beta. Fridman will also continue in her role as Global Head of Research for PAAMCO; Jorion will remain head of Risk Management for PAAMCO.   

“Passive management has transformed the asset management industry with index funds.  The next wave of innovation was ‘smart beta’ funds.  Now, ‘alt beta’ funds are primed to be the next step,” says Jorion. “We believe alt beta products can be harnessed to add value to investor portfolios through proper component selection and structuring.” 

“We believe PAAMCO is in a strong position to provide a diversified alternative beta solution,” says Fridman.  “We see investors looking for diversifying sources of returns to traditional asset class allocations while focusing on costs. I am thrilled that we are able to add PAAMCO Alt Beta to the suite of tools.”

Benefits February 15, 2018

Equity Compensation Recipients Seek Financial Wellness Help

Three-quarters of respondents to a Schwab Stock Plan Services survey consider equity compensation part of their long-term financial plan, and most say their equity compensation helps them feel less stressed about their finances and more prepared for retirement.

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Equity compensation can serve many important functions in participants’ overall financial strategies. While employees utilize their benefits in multiple ways, they are most likely to do so to get needed cash (35%), make a large purchase (28%) or help prepare for retirement (11%), according to a survey from Schwab Stock Plan Services.

The average total value of their equity compensation is $72,245, and approximately two-thirds (63%) of employees are fully vested. 

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The study also reveals approximately three-quarters (76%) of respondents consider equity compensation part of their long-term financial plan, and most say their equity compensation helps them feel less stressed about their finances (76%) and more prepared for retirement (63%). Boomers (84%) and Gen Xers (81%) are most likely to consider equity compensation as part of their long-term plan, compared to 31% of Millennials who expect to use their equity compensation in the short-term.

But the survey demonstrates that many equity compensation participants could use help in making the most of their benefit. Only half of respondents are confident in their ability to make the right decisions about their plan on their own.

According to the nationwide survey of 1,000 equity compensation plan participants who receive incentive stock options, restricted stock awards and/or participate in employee stock purchase plans (ESPPs), just 24% have exercised employee stock options or sold shares that are part of their equity compensation. Fear of making a mistake is a concern for nearly half (48%). Among those who have never exercised or sold their equity compensation or ESPP, 34% admit to being worried about selling under the wrong market conditions and 34% say they are afraid of potential tax implications of making a wrong decision.

Eighty percent of all respondents say they would be much more confident with the help of a financial adviser. Respondents would like advice on the tax implications of their decisions (50%), using the benefit to help prepare for retirement (44%) and knowing when to exercise or sell their equity awards (35%).

Additionally, survey participants say they would take advantage of a financial wellness program—which would provide education, tools and resources to help with their overall financial health—if it were offered by their employer. Two-thirds of respondents who have access to this benefit take advantage of it, and most participants (96%) find it helpful when making equity compensation decisions. But, only 43% of respondents’ employers currently offer a workplace financial wellness plan.

When considering the components of a financial wellness program they value the most, respondents say they want a holistic plan that goes beyond just equity compensation advice. They are looking for resources to help them with planning for retirement (65%), a free or discounted consultation with a financial adviser (51%), help with personal wealth building (45%) and help with developing savings goals (44%).

“Employers offer equity compensation to reward employees, drive engagement and improve recruiting and retention. The good news for employers is that it’s working. Employees clearly place a high value on these programs, but they are also asking for more help. Delivering that help is the next best step employers can take to further increase the effectiveness of their equity compensation programs,” says Marc McDonough, senior vice president, Schwab Investor Services.

 

Detailed results can be found here.

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