Investment Product and Service Launches

Wells Fargo launches Retirement Income Solution, and Morningstar to acquire Sustainalytics.

Wells Fargo Launches Retirement Income Solution

Wells Fargo Asset Management has launched the Wells Fargo Retirement Income Solution. The company notes that with increasing life expectancy, many workers and retirees don’t know how long their retirement savings will need to last.

Based on patent-pending research, the Wells Fargo Retirement Income Solution is designed to enable participants to seamlessly transition from investing for retirement to drawing income in retirement. Participants can pair a target-date series with a qualified longevity annuity contract (QLAC).

“We believe our suite of retirement-oriented solutions has the potential to help millions of Americans live more fulfilling lives,” says Nate Miles, head of retirement at Wells Fargo Asset Management. “By providing an option for more consistent retirement income, we help retirees address their fear of running out of retirement savings.”

Wells Fargo provides 3(38) fiduciary services for the selection of the insurance carrier to provide the annuity. Wells Fargo will also work with recordkeepers to improve simplicity and portability.

Sean Fullerton, retirement investment strategist at Wells Fargo Asset Management, adds: “Defined contribution [DC] plans are becoming the primary source of retirement income for many individuals. As an industry, we need to focus not only on helping people save while working but also on helping them spend sustainably once they retire.”

Morningstar to Acquire Sustainalytics

Morningstar has reached an agreement to acquire Sustainalytics, a provider of environmental, social and governance (ESG) ratings and research. Morningstar currently has a 40% ownership stake in Sustainalytics, which it took out in 2017.

Morningstar is purchasing the remaining 60% stake for 55 million euros ($59 million) and additional cash payments in 2021 and 2022 based on a multiple of Sustainalytics’ 2020 and 2021 fiscal year revenues. Morningstar estimates the enterprise value of Sustainalytics to be 170 million euros. Morningstar expects to close on the transaction early in the third quarter of this year.

“Modern investors in public and private markets are demanding ESG data, research, ratings and solutions in order to make informed, meaningful investment decisions,” says Morningstar Chief Executive Officer Kunal Kapoor. “From climate change to supply-chain practices, the nature of the investment process is evolving and shining a spotlight on demand for stakeholder capitalism. This is the future of long-term investing.”