The Daily Brief
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What’s the Carbon Risk of Your Portfolio?

Morningstar launches carbon risk scores, guaranteed lifetime income is important to clients and CAIS teams with SEI on private placement processing.

In March 2016, Morningstar rolled out its Sustainability Rating for global mutual and exchange traded funds to provide insight into each fund’s environmental, social and governance impact. Now the research firm is looking to help investors determine a portfolio’s carbon footprint. The new Portfolio Carbon Risk Score will identify funds that hold companies with low carbon emissions or are lowering carbons emissions in line with the Paris agreement. The firm will apply the score to about 30,000 funds globally that will be calculated via Sustainalytics, the provider of ESG and corporate governance ratings and research. Last year, Morningstar acquired a 40 percent stake in Sustainalytics.

Clients Want to Discuss Guaranteed Lifetime Income with Advisors

Financial advisors who discuss guaranteed lifetime income with their clients are rated more highly than those who don't, according to a new study by AXA US and The Insured Retirement Institute. The study, conducted by Greenwald & Associates, found that 80 percent of individuals are interested in learning about a retirement option that offers principal protection and the potential for growth. Fifty-six percent rate their financial professional highly when lifetime income is discussed, versus 34 percent who do so when it’s not brought up. However, only 50 percent say they discuss guaranteed lifetime income with their financial advisor, compared to 80 percent who discuss risk tolerance. Kevin Kennedy, head of the Individual Retirement business at AXA, said the study results show a clear opportunity for advisors to delve deeper into their clients past the traditional risk tolerance questionnaire and into more income-planning for healthcare expenses. Nearly 60 percent believe they are somewhat or not very well prepared for a major health event, the study shows, yet less than 20 percent said they have worked with their advisor to estimate retirement healthcare costs. “This research underscores financial professionals’ pivotal role in helping retirement savers to gain comfort around their ability to withstand market volatility and the potential role of high quality annuity products in helping to achieve financial security,” said Catherine Weatherford, president and CEO of Insured Retirement Institute. “In return, financial professionals will be rewarded with higher client satisfaction.”

CAIS Brings on SEI Platform to Ease Private Placements for Advisors

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Private placements and other alternative investment strategies may be useful for some clients, but handling the intensive paperwork process of tracking them can be daunting. To help smooth the process, CAIS, a technology platform that gives advisors access to alternative investment strategies, announced an integration with SEI Trade, SEI’s cloud-based back-office automation process for investments and transactions. The move will free up CAIS to focus on other “revenue-generating” activities and improve the user experience of the platform for advisors, according to the company. “Embracing such forward-looking technology from an industry leader such as SEI allows CAIS to shift the focus of our considerable technology resources from other operational functions to revenue-generating solutions such as advisor engagement, product education and efficient fund distribution,” said Tim Shannon, president and COO of CAIS, in a statement.

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