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Home Office News: Sharp Growth in BofA HSAs, Schwab Touts ESG, and More

By Julie Daclag May 28, 2021

Below is a look at some changes major distributors have made to their platforms that may have flown under your radar in the past month, collected from Distributor Profiles, a service of sister publications Ignites and FundFire.

BofA’s HSA average balance sharply higher

The average balance in health savings accounts administered by Bank of America grew by 17% last year, outpacing money in retirement accounts, according to the 2021 Financial Life Benefits Impact report.

The average HSA record kept by the bank amounted to $3,398, and the bank had more than one million funded accounts at the end of 2020, according to the report. The employee contributions to the HSAs grew by 10%.

HSA assets are higher because participants are more aware of the benefits of using the accounts for long-term savings, according to Kevin Crain, head of workplace solutions integration within BofA’s retirement business.

More plan participants are using BofA’s retirement Benefits Online app — with participant usage up 87% in 2020 year over year, the report shows. Online portal transactions increased by 20%.

Crain says BofA plans to add more artificial intelligence to the app to personalize each user’s experience. The app has added a financial wellness tracker for participants to track their goals.

The report also shows higher use of target-date funds and environmental, social and governance investments within BofA’s retirement plans.

Plans with TDFs increased by 17% in 2020, and around 37% offer target-date options. More than half of the participants have all their assets invested in plans with TDFs.

ESG investments increased by 9% last year, with one in 10 participants investing in ESG funds.

Charles Schwab promoting ESG investments

Charles Schwab is promoting thematic investing and direct indexing as optimal for ESG investing and plans to roll out products in the coming quarters, according to CEO Walt Bettinger.

"Much of the emphasis that we are putting [on ESG products] is on the development of personalized investing that would allow each individual to assemble a portfolio that is consistent with their own values and their own views around the societal impacts of the investments that they make," Bettinger said earlier this month.

Bettinger did not provide more details about the upcoming products.

BNY Mellon sells Pennsylvania operations center

Pershing’s parent company, BNY Mellon, has sold a Pennsylvania operations center housing its turnkey asset management program Lockwood Advisors and BNY Capital Resources divisions.

E. Kahn Development bought the building located at 760 Moore Road in King of Prussia for $24.5 million.

However, Lockwood’s current Form ADV still lists the address as its principal address for Lockwood Advisors, Lockwood Insurance, and Lockwood Solutions.

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Tags:  Finding and winning new clients , Client retention , Investment strategies , Retirement planning , Portfolio management , Bank of America , Lockwood Advisors , Pershing , Schwab

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