In an article for InvestmentNews, Jeff Benjamin discussed the need for succession planning especially as there are about 100,000 advisors that are expected to retire over the next decade. In total, they are estimated to control $10 trillion in assets. 

Of this group, 45% intend to transfer ownership to employees or a family member. Around 30% are looking for an external transition, while 25% do not have a firm succession plan. According to industry insiders, this is a major challenge for the industry especially as succession plans take time to prepare. Additionally, there needs to be guidelines for alternative scenarios especially as fewer young people are entering the industry.

Even in the event of a sale, there are complications and contingencies that need to be considered such as your clients’ comfort and the financing of such a transaction. With internal transitions, unexpected events can also arise such as relationships souring with prospective owners that result in a shift of strategy or advisors being recruited away to other firms. 

Finsum: Financial advisors need to have a succession plan. This is especially critical given the wave of retirements that is expected to hit over the next decade. 

In an article for MarketWatch, Morey Stettner discussed various options for alternative investments including non-traded real estate, private debt, venture capital and hedge funds. The asset class delivered strong returns in 2022 especially compared to stocks and bonds. 

Looking ahead to the next decade, alternative investments are expected to fare better especially as they offer diversification to investors with the potential for higher returns. The traditional 60/40 allocation does not seem sufficient for a higher-rate, higher-inflation regime, and alternatives could be one solution for advisors to help clients reach their goals. 

There are also some additional considerations about alternatives that advisors need to understand. For one, money isn’t immediately deployed especially in private equity and venture capital. Additionally, money often cannot be immediately redeemed, while there is less transparency about pricing in less liquid markets. 

Many investors see opportunities in private real estate and venture capital especially as savvy managers will be able to take advantage of the dislocations in these arenas. Many also believe the asset class would outperform in a recession or inflation scenario which would likely continue to be a major headwind for stocks and bonds. 

Finsum: Alternative investments continue to attract interest especially due to stocks and bonds coming off a poor year in 2022.

Fixed income: yer up.

While it was hardly a go to when rates were south, they’ve rediscovered their mojo, with a hefty infusion of capital, according to prominent investors at a recent major industry conference in Beverly Hills, reported money.usnews.com.

Fund managers at the Milken Institute Global Conference said among popular products are bond funds.

So, what’s going on? Well, given the uncertainty over interest rates, a potential recession and U.S. debt default, stocks and  real estate are getting the cold shoulder.

"Things are very different now," said Elizabeth Burton, a managing director and client investment strategist at Goldman Sachs.

"You get a good sense of consensus at these conferences," noted Katie Koch, president and CEO of investment firm TCW. "And I think people are still feeling a little too good."

Heading into the second quarter, Principal Financial Group indicated there were opportunities for investors in fixed income; that is, if they’re up to brooking rocky times in the short run. The tradeoff? Results in the long run, according to seekingalpha.com.

Financial practices have an opportunity.

And it’s golden.

According to Tim Gerend, executive vice president and chief distribution officer at Northwestern Mutual, his firm’s annual Planning & Progress Study found that more than half of U.S. adults are anxious about their finances, reported thinkadvisor.com. This was part of remarks he made at the recent 2023 LIMRA Distribution Conference in Orlando.

On top of that, as for their financial future, they feel far from certain.

Fortunately, to help them prop up their security, Americans embrace the idea of seeking the help of financial advisors to help them formulate financial plans.

While that means the opportunity is ripe for the industry to build its impact and assist those who need it, Houston, we have a problem: the dearth of financial professional to handle the load.

That said, advisors should bear this in mind: If they’re not leveraging social media, you have company     according to blackrock.com.:

Forty four percent of financial advisors don’t indulge. Okay, so that might not prevent you from succeeding, ask yourself a question: how will  your growth remain on track given that among young investors, social media’s their “go to” when considering and choosing financial professionals among service providers.

In an article for Reuters, Mike Dolan discussed the widening gap between market volatility which has been trending lower since October of last year and headlines of various geopolitical, financial, and economic risks that are increasingly dominating headlines. The Federal Reserve is expected to hike rates despite signs that the economy continues to decelerate, considerable stress in the banking system, increasing chatter of a ‘technical default’ for the US Treasury if the debt ceiling is breached, and important data points in the coming weeks in the form of earnings from tech giants and the April jobs report. 

Despite these potential threats, the VIX, which measures stock market volatility, reached its lowest levels since November 2021. The stock market is also nearing a 20% move rise from its October lows, which many market participants would define as a new bull market. Volatility is similarly depressed in the Treasury market and the currency markets despite upcoming central bank meetings, indicating that this divergence between the VIX and headline risk is not unique to equities.

Finsum: There is a widening gap between various headline risk and market measures of volatility which are at multi month lows.