Merrill Lynch scooped up a four-person Citi Private Bank team that manages $1 billion in client assets. The team, which is based in Connecticut and New York is led by Frank A. Falco, who will be based out of Merrill’s Great Neck office on Long Island. The rest of the team includes Kevin C. Condon, John R. Huber, and Alexandra Maksimow, who will be based out of its Stamford, Connecticut office. Members of the team joined Merrill Lynch on a staggered schedule over the past couple of months after serving out their garden leave terms. Falco spent 22 of his 25 years in the industry with Citi. He started his career at Gaines, Berland Inc. in 1997. Condon had been with Citi for the previous seven years and started his career in 1992 as a portfolio manager with U.S. Trust. Huber had been with Citi since 2007 and started in the business at Prime Capital Services in 2005. Maksimow began her Citi career in 2012 as a credit analyst in the commercial bank before switching to the private bank in 2016. The move is noteworthy since the team is coming from the private banking channel and not the wealth management channel. However, Merrill has occasionally pulled in other salaried private bankers in recent years despite its freeze on veteran broker recruiting since 2017.

Finsum:Merrill Lynch nabbed a $1 billion team from Citi Private Bank despite its freeze on veteran broker recruiting. 

Based on the results of a recent survey by Broadridge, advisors are still not embracing direct indexing. The survey data showed that just 12% of advisors are “very familiar” with direct indexing. In fact, fewer than one-third even consider themselves “somewhat familiar” with direct indexing, while 40% say they are aware of the technology, and 15% have never heard of it. Ram Ramaswamy, Head of Custom Direct Indexing at Neuberger Berman, told Ignites that he has encountered resistance from advisors to any new investment option. “The first thing we hear from a lot of advisors is that they are comfortable using the ETF and mutual fund model,” said Ramaswamy. In addition to resistance to new investment options, data gathering could be another impediment. Cindy Galiano, Head of Product, Investment Management at Morningstar Wealth, told Financial Advisor IQ, “Implementing direct indexing successfully requires a lot more than a Bloomberg terminal and a list of client holdings. An enormous amount of data is needed that ranges from benchmarks and prices to sophisticated risk models and portfolio optimization tools.”

Finsum:Due todata gathering and resistance to new investment options, advisors are still not embracing direct indexing. 

Category: Wealth Management

Keywords: advisors, direct indexing, tax efficiency, ESG 

Perhaps you’ve heard: inflation seems to have an insatiable appetite and the short term outlook in fixed income are being dominated by interest rates spikes by the central bank, according to ssga.com.

Ah, but there is a life preserver: longer term, structural factors are having more than a little sway in how  investors implement and oversee fixed income allocations.

'Did someone say life preserver’, grumbled the Skip from Gilligan’s Island?

‘Fraid so, dude.

And you want to know the punch that ETFs are packing in in the evolving landscape of fixed income? Well, consider ssga’s new global study, which surveyed 700 institutional investors and investment decision makers.

One key finding: there was a growth from assets under management from $574 billion in 2017 to $1.28 trillion in 2021, according to data recorded by the New York Stock Exchange. What’s more, the number of funds also accelerated like no one’s business over the same period – from 278 to almost 500.

As for non core sectors? The role of ETFs in asset allocation is propelling, according to its survey this year.

According to the report, 62% of investors who are ratcheting up their exposure to high yield corporate credit over the next 12 months indicated the chances are high they’ll leverage ETFs to do it. Ditto for 53% in terms of emerging market debt, according to pionline.com.

"Our 2022 survey shows that the role of ETFs in asset allocation is expanding to non-core sectors," said the report, "The Role of ETFs in a New Fixed Income Landscape." 

Try active fixed management, which has an eye on managing the different risk characteristics of the fixed income market, according to madisoninvestments.com.

When these risks bubble to the top, the price tag on a bond might go kerplunk, potentially jeopardizing  interest payments down the line. The upshot: your portfolio could take a hit. Yeah; ouch. Meantime, common as they are, passive buy and hold strategies – or ETFs – have a history of missing the mark on addressing risks linked with fixed income.

On the radar of active fixed management is managing the various risk characteristics of the fixed income market. A portfolio can act in light of market conditions with active decision making within a portfolio.

Okay, so if you’re searching high and low for white knuckle thrills, fixed income investing might not be the Uber pickup you’re looking for. 

But…Isn’t there always one? The market volatility sparked by the aftermath of the COVID pandemic, bond specialists might want to hold on tight, according to benefitscanada.com.

“There’s more yield in the marketplace, so bonds are becoming a better competitor to stocks. . . . You should be asking yourself, how do I get more to my portfolio’s core allocation?” said Jeffrey Moore, portfolio manager in the fixed income division at Fidelity Investments, during the Canadian Investment Review‘s 2022 Risk Management Conference, the site continued. “I think there’s a whole bunch of ways.”

They’re watching

Meaning mediablog.com, which reported a few ways it picked up on the radar on companies tweaking their ESG messaging in various publicity pieces this month. 

There’s a focus on the “E” in ESG; namely, increasingly, Americans are fretting over and more engaged with global warming

The “S”? No less important, especially if you have a soft spot for “great” community outreach programs and the money set aside toward it. 

Meantime, 94% of people didn’t believe enough had been done to advance the cause of sustainability and social issues, according to a recent global study from Oracle.

Now, in the landscape of success breeds success, the second edition of the “ESG and Green Finance Opportunities Forum” by The Chamber of Hong Kong Listed Companies will take place on Oct.  27, according to finance.yahoo.com.

That comes in the aftermath of last year’s inaugural event. The theme for this year’s is Navigating Climate Risk and Financing Climate Actions.

Confirmed to deliver the opening address is Financial Secretary Paul Chan Mo-po. A luncheon speech will be given by Secretary for Environment and Ecology Tse Chin-wan.