Product & Service Launches

Nationwide, Morningstar team up on adviser-managed accounts; OneAmerica launches active TDF series of CITs; Cullen brings first income-generating ETF to NYSE; and more.

Nationwide Partners With Morningstar on AMAs

Nationwide Retirement Solutions, a division of the insurer, has partnered with Morningstar Inc.’s retirement group on an adviser-managed account offering for advisers working with institutional and government plans.

The AMA will allow advisers to deliver “professional advice and savings strategies for plan participants in an easy, accessible way,” according to the announcement. Participants will have access to personalized retirement strategies, Morningstar’s retirement engine and methodologies packaged by the advisers.

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Morningstar’s AMAs allow registered investment adviser firms to offer a co-branded service. Plans do not incur any additional cost for offering the service, according to the announcement, and participants who enroll will pay “account management fees that are competitive with similar services on the open market.”

“Managed accounts are designed to help participants feel confident that they have the right strategies in place when it comes to saving and investing for retirement,” Craig Hawley, senior vice president of retirement solutions sales at Nationwide, said in the announcement. “Through this collaboration with Morningstar Retirement, we’re able to offer a service that combines the best of both worlds: personalized advice and professional management from a trusted adviser and our award-winning service.”

The offering adds to Nationwide’s ProAccount managed account service, which it has been offering since 2006.

OneAmerica Launches Active TDF Series With American Funds and Great Gray Trust

OneAmerica Financial has launched an actively managed target-date series of collective investment trusts in partnership with Capital Group’s American Funds and Great Gray Trust Co. LLC, according to an announcement.

OneAmerica’s RetirementTrack American Funds CIT series is only available to defined contribution retirement plan platforms. Great Gray is the trustee for the CITs, which are designed to offer lower fees to participants than mutual funds; Great Gray is using subsidiary flexPATH Strategies LLC to assist in fund management.

Fees for the TDFs will depend on the share class selected by investors; they range from 25 basis points, or 0.25%, to 59 basis points, according to OneAmerica. The series adjusts its mix of bonds and equities over time and manages risk based on a participant’s age—with those further from retirement weighted more toward to equities, and those closer to retirement weighted more toward fixed income.

“This is another great option for OneAmerica Financial clients who want to help their participants take control of their retirement strategy,” said Alan Blaskowski, vice president of product, business development and innovation for retirement services, in the announcement.

RetirementTrack American Funds also combines American Funds mutual funds with a stable value vehicle backed by American United Life Insurance Co., a OneAmerica Financial company, according to the announcement. The offer adds to OneAmerica’s RetirementTrack TDF series, also a set of CITs with Great Gray as trustee, which have passed $1 billion in assets in three years.

Cullen Capital Management Unveils Innovative 1st ETF

Cullen Capital Management LLC has launched an exchange-traded fund that offers income generation through a combination of dividends and covered-call premiums, according to the asset manager.

The Cullen Enhanced Equity Income ETF has launched on the New York Stock Exchange under ticker DIVP. The fund mimics the firm’s equity income strategy previously only available to investors through separately managed account and mutual fund offerings.

Cullen Capital has partnered with SEI Advisors’ Inner Circle Fund for portfolio management.

“After 13 years of successfully running a dividend equity, covered call, separately managed account, there was strong client demand to offer the same strategy in an ETF vehicle,” said Jeff Cullen, the managing director at Cullen Capital, in a statement.

DIVP integrates dividends from equity holdings with premiums from covered-call options written on approximately 25 to 40% of the underlying securities, according to Cullen. It aims, through this strategy, to offer higher income potential than other equity-income investments. 

Cetera Offers Bitcoin ETF Policy and Guidance for Financial Professionals

Cetera Financial Group has introduced policy and guidance to its affiliated financial advisers regarding the use of bitcoin exchange-traded funds in brokerage accounts.

The firm’s policy includes education and resources designed to help financial professionals guide clients in incorporating bitcoin ETFs into investment portfolios. Cetera said it is among the first wealth managers to roll out a policy on bitcoin ETFs to meet investor demand for information on the products.

“As expected, we are prudently embracing bitcoin ETFs, and we prioritized developing this important guidance to help our financial professionals implement these products in client portfolios,” said Matt Fries, Cetera’s head of investment products and partner solutions, in a statement. “We will continue to proactively evaluate the implications of bitcoin ETFs and related products and modify our policies accordingly.”

Cetera has approved usage of the following spot bitcoin ETFs for its affiliated advisers:

  • and Blackrock iShares Bitcoin Trust (IBIT);
  • Fidelity Wise Origin Bitcoin Fund (FBTC);
  • Franklin Bitcoin ETF (EZBC); and
  • Invesco Galaxy Bitcoin ETF (BTCO).

About 50 million people own bitcoin, as of February 2024, more than twice as many as the 20 million who did in 2023, according to Cetera, citing the number of unique addresses with non-zero balances of bitcoin. 

Plaintiffs Request Judge Approve Settlement in ERISA Data Breach Lawsuit

Attorneys for the plaintiffs in a case about cybersecurity liability for participant data asked a Georgia federal judge for final approval of a multimillion dollar settlement .

Retirement plan participants whose personal identifiable information was exposed in a 2021 data breach have asked a Georgia federal judge to approve an $8.733 million agreement to resolve allegations, which claimed national consultant Horizon Actuarial Services LLC failed to safeguard their sensitive data.

The plaintiffs’ attorneys are seeking final approval from the court of the proposed class action settlement. The settlement would resolve all claims related to the data security incident on behalf of the settlement class of approximately 4,386,969 individuals nationwide. The case is Justin Sherwood, et al. v Horizon Actuarial Services LLC

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The plaintiffs’ attorneys write that agreement negotiated between the parties is “a fair, adequate and reasonable settlement, which guarantees members of the settlement class will receive significant compensation in direct reimbursements for the benefit of all class members.”   

Per the proposed settlement, members may self-certify the amount of time they actually spent resolving issues related to the data security incident.

Horizon has agreed to pay the total settlement amount into a fund to be used to make payments to settlement class members, administrative expenses, and attorneys’ fees and expenses.

Settlement class members’ are eligible for total reimbursement for any out-of-pocket losses together with any repayment for time losses is capped at $5,000.  

If approved, the settlement dismisses with prejudice all claims of the class against Horizon in the action, without costs and fees except as explicitly provided for in the settlement agreement.  

On March 11, attorneys for the class of plaintiffs filed a memorandum in support of their motion and two briefs to support their contention the settlement should be approved.  

“The question of liability on the part of service providers to plans for cyberattacks is an emerging issue,” says Drew Oringer, partner in and general counsel at the Wagner Law Group, which was not involved in the litigation. “This settlement is a reminder to recordkeepers and other service providers that the occurrence of a data breach could have significant financial ramifications for providers that may be accused of not having done enough to protect participant data.” 

Earlier this year, U.S. District Court Judge Eleanor L. Ross scheduled the final approval hearing for Thursday, April 4.

Plan sponsors, which provide Employee Retirement Security Act-regulated retirement plans and other benefits must consult the Department of Labor’s Cybersecurity Program Best Practices, if they have not previously, adds Oringer.

The parties have agreed to use legal services provider Epiq as the claims and settlement administrator.

The opt-out and objection deadlines have passed. Some 102 individuals have opted out of the settlement. No objections to the settlement have been received by the settlement administrator, but two objections have been submitted to the court and entered on the docket.

The court previously granted preliminary approval of the proposed settlement in September 2023.

The original complaint was filed in U.S. District Court for the for the Northern District of Georgia, Atlanta Division, in 2022.  

Justin Sherwood, the lead plaintiff in the case alleged Horizon Actuarial Services LLC, a provider of actuarial and administrative services to retirement plans and other client types, failed to properly secure and safeguard sensitive personally identifiable information provided by and belonging to its customers.

The complaint alleged Horizon experienced a data security incident in November 2021 during which unauthorized third parties gained access to its network and file server.

Horizon investigated the cause, scope of the incident and determined that files containing plaintiffs and settlement class members’ names, address, Social Security numbers, benefit plan enrollment data and dates of birth were accessed without authorization and reported stolen. 

Representatives of Horizon did not respond to a request for comment; nor did attorneys for the plaintiffs and defendant.

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