Investment advisor and banking solutions provider Save recently announced that it launched a savings product that is focused on ESG investing. The firm said in a recent press release that its "Market Savings program offers an option that provides a yield from iShares ESG Aware exchange-traded funds (ETFs) and other ETFs.” According to the press release, the ESG Market Savings portfolio aims to maximize environmental, social, and governance characteristics and exclude companies with certain practices. The release also said that since the launch of this ESG portfolio, about 10% of the people who have signed up for Market Savings have selected the Save ESG portfolio. Save Founder and CEO Michael Nelskyla said the following in the release, “Consumers are increasingly turning to ethical choices in all aspects of life including investments. We see it as our fiduciary responsibility to offer ethical investing through our Market Savings program for those consumers who seek these choices.” The Market Savings program on Save’s Savetech platform offers a yield that varies according to underlying market performance. It also noted that customer deposits are FDIC insured.

Finsum:Save announced that it launched an ESG Market Savings portfolio that aims to maximize environmental, social, and governance characteristics and exclude companies with certain practices.

According to Cerulli Associates' U.S. Exchange-Traded Fund Markets 2022 report, active fixed-income ETFs present a massive opportunity for firms. Daniil Shapiro, a director in product development at Cerulli, said in a recent interview that "a mix of factors" have combined to create the opportunity. He stated, "You have investors that are showing an increased preference for the ETF structure and they're increasingly open to accessing fixed income through the ETF structure. At the same time, you have interest rates that are increasing, which makes fixed income more attractive to investors." The report was based on polling Cerulli conducted in the third and fourth quarters of last year. It revealed that among advisers using ETFs, the portion using U.S. fixed-income ETFs has continued to increase, with 70% reporting such use in 2022, up from 63% in 2021. In addition, when ETF issuers were asked to gauge key drivers of fixed-income ETF flows over the next 24 months, greater adviser familiarity with fixed-income ETFs topped the list, cited by 66% of respondents. The second biggest driver was the increased use of fixed-income ETFs by institutions, which was cited by 55% of respondents.

Finsum:According to a new report by Cerulli Associates, active fixed-income ETFs present a massive opportunity for firms due to investors preferring the ETF structure and fixed income being more attractive with higher rates.

According to a recent study by Lincoln Financial Group, market volatility is pushing Americans to refine their financial goals this year. The study revealed that 88% of Americans said they see room to improve their overall financial wellness, while 71% are likely to set financial goals in 2023. The respondents said that inflation and market volatility has made preparedness a top financial priority. For instance, 56% said protection from risk is most important to them, 39% said their greatest money goal is protecting their family, and 26% said guarding their income was a top priority. While data is showing that inflation is beginning to slow, there are still real concerns over whether the U.S. economy could enter a recession this year. This has investors nervous. David Berkowitz, Lincoln Financial Network president, said the following in a statement, "Our research reinforced the importance of financial solutions that can help consumers navigate through market cycles and protect their loved ones. People are not only concerned about having enough to pay their bills, but also saving for retirement and preparing for the unexpected.” For example, 40% of respondents said that financial protection meant being able to comfortably pay for basic living.

Finsum:A recent study by Lincoln Financial revealed that market volatility and inflation are pushing a majority of investors to set financial goals this year to navigate the market uncertainty.

While investors remain spooked by market volatility, Goldman Sachs believes direct indexing may benefit from the volatility. In its recent Market Know-How report, the firm wrote, “Direct indexing involves purchasing the underlying shares of an index, rather than owning an index fund. This investment strategy prioritizes tax-loss harvesting, which builds tax savings through capital losses while attempting to keep tracking error tight to the benchmark. Tax-loss harvesting works not only in down years but also in up years, historically, as individual constituents can still see intra-year declines.” The firm also listed the benefits of direct indexing beyond the tax-alpha achieved from harvesting losses. For instance, the firm lists benefits such as the ability to liquidate concentrated stock positions, reduce active risk in portfolios, and help offset significant taxable events such as the sale of a business or real estate. These can all be achieved through building a “war chest of capital losses.” In addition, Goldman also wrote that “owning individual securities instead of an index fund allows investors to achieve these potential benefits while expressing preferences, such as sector tilts.”

Finsum:In a recent report, Goldman Sachs stated that direct indexing may benefit from market volatility since the strategy prioritizes tax-loss harvesting, and historically, tax-loss harvesting works in both up and down markets.

If advisors are looking to build out their practice, they should look no further than Millennials and Generation Z. That is according to Fidelity, which believes younger investors represent substantial, long-term wealth potential. According to a recent report from Fidelity Institutional, population and wealth are significantly shifting to the younger generations, who now collectively represent 47% of the U.S. population. These findings came from the Fidelity Investments 2022 Investor Insights Study, which included 2,490 investors who were 21 and older and had household investable assets of $50,000 or more. Fidelity also offered recommendations on how to approach younger investors. For instance, advisors should create an ideal profile of the young clients they would like to work with. They should also engage with the children of their current clients as a way to retain assets when wealth is transferred. Financial advisors can differentiate themselves by becoming a coach and elevating the client experience with frequent check-ins and establishing and monitoring financial routines. In terms of gathering clients, Fidelity recommends that advisors refine their social media strategy to capture their attention, while also telling younger prospects what they do for the community and the causes that they care about.

Finsum:According to a recent study by Fidelity, advisors should consider reaching out to Millennials and Generation Z as they offer substantial long-term wealth potential.