A financial advisor succession plan? It’s a component, of course, of a strategy to pass the baton of a practice to another advisor. Long and short term planning’s typically is part of the plan, according to assetmark.com.

It could be that one component of the plan is the outright sale – internally or externally -- of the business. Or you might add a junior advisor as your successor down the road or pass it to a family member.

Face it: a retirement plan’s a big time consideration for independent financial professionals and, often, comes down to them establishing a succession plan for their business. 

A trio of benefits stemming from proactive succession planning include: 

Peace of Mind

A succession plan to add to the value of your business and enhance its marketability and:

Provide you an opportunity to prepare next generation advisors

Organizations; yes, they get it. Succession planning’s nothing to poo poo at. That said, when it comes to pulling it off well, it’s a different story, according to delotitte.com.

It takes having the right leaders doing the right jobs at, you’ve got it, the right time, as most organizations recognized years ago. Even so, not many of those very companies have managed to be  proactive, not to mention, disciplined, about carrying out succession planning processes that strike gold, the site continued.

By the end of the year, a goal of the Financial Industry Regulatory Authority is to examine 1,000 broker-dealers for Reg bi compliance, according to Bill St. Louis, head of Finra’s National Cause and Financial Crimes Detection Program, reported advisorhub.com.

That’s no small potatoes, considering that the total would account for about a third of the organization’s approximately 3,000 member firms. Compliance flaws in half of its exams were linked to the rule, which is more than two years old, last year.

An update of an annuity sales standard was adopted by Georgia, Illinois and Tennessee, according to thinkadvisor.com. It was developed by the National Association of Insurance Commissioners.

The update was designed by the NAIC to abet the U.S. Securities and Exchange Commission’s Regulation Best Interest sales standard. Its been adopted by a minimum of 33 states.

Failure by enough states to uniformly adopt the update might mean that the SEC could lasso the ability to oversee some aspects – at the minimum -- of sales and fixed annuities, some regulators think.

Jonathan Foster, president, and CEO of Angeles Wealth Management, recently penned an article on MarketWatch where he listed the benefits of direct indexing for retail investors. Foster noted that while direct indexing is primarily used by high-net-worth investors that are seeking to optimize their after-tax returns, the widespread elimination of brokerage trading fees and the growing availability of fractional share trading have led to greater adoption of direct indexing. According to Foster, the advantages that direct indexing can bring to a portfolio include ‘dirty money,’ outmoded mutual funds, and personalization. Foster says that ‘dirty money’ refers to investors expressing concern about how the companies they invest in make money. For instance, direct indexing offers advisors the ability to craft portfolios that exclude what their clients believe to be “dirty money.” Foster uses tobacco as an example. In this instance, direct indexing can help an investor craft a tobacco-free portfolio. Outmoded mutual funds refer to investors using mutual funds in taxable accounts and not having the benefit of starting with their own individualized cost basis, which can lead to distributable annual taxable gains. With direct indexing, investors can take advantage of tax-loss harvesting. Direct indexing can also offer investors an opportunity to customize portfolios with strategies such as ESG.

Finsum:A wealth management executive recently wrote an article on MarketWatch advocating for direct indexing due to benefits such as excluding certain securities, employing tax-loss harvesting, and customizing a portfolio for certain strategies.

JPMorgan Chase & Co.’s brokerage unit recently lured a Miami team from UBS Wealth Management USA with $4.8 million in revenue, while also picking up a solo advisor from Goldman Sachs who produced $2.3 million in Boston. The Fernandez Cabrera Group, which is led by Pedro Fernandez and Jesus (J.C.) Cabrera joined J.P. Morgan Advisors on Friday and had overseen $700 million in assets as of year-end at UBS. Fernandez and Cabrera moved along with client associate Charlene Meizoso. They report to Rick Penafiel, regional director for Boston, Miami, and Palm Beach Gardens. Fernandez started his financial career at Sanford C. Bernstein & Co. in 2004 and joined UBS in 2014. Cabrera started as a broker in 1984 at First Investors Corporation and only stayed at the company for a year. He registered again in 2012 when he joined Bernstein. In addition, Brent Herbert joined J.P. Morgan in February after overseeing around $445 million in assets at Goldman. He has 13 years of experience and joined Goldman in 2017 from Mizuho Securities. Herbert also reports to Penafiel. JPMorgan is close to two years into a campaign to double its headcount from the roughly 450 at its traditional brokerage.

Finsum:J.P. Morgan lured away a $4.8 million duo from Miami, while also adding a $2.3 million solo advisor from Goldman Sachs.

Category: Wealth Management

Keywords: JPMorgan, UBS, Goldman Sachs, recruiting

Fixed-income professionals at Franklin Templeton and its affiliates expect fixed-income investments to be a safe haven from equities volatility since the financial markets are showing signs of stress. Tracy Chen, a portfolio manager at Brandywine Global, stated that “We believed something would break, even before this banking crisis happened. Now bonds provide safe haven protection for people’s portfolios because our timeline for recession is pulled forward because of this banking stress.” She recently spoke at a webinar on fixed-income mega-trends, entitled “Navigating Rates and Risk.” She was also joined by Jennifer Johnston, senior vice president and director of municipal bond research at Franklin Templeton, and Annabel Rudebeck, head of non-US corporate credit at Western Asset. Currently, yields are around 5% for corporates, which is considered attractive when compared to the longer-term history and government issuances. Johnston added that the tax-free attributes of municipal bonds provide an extra boost, while the muni market tends to be of higher quality than the corporate market. She stated, “We do see some opportunities, particularly out long, where munis are still relatively cheaper than where they’ve been in the past.” Chen also added that “This banking stress is very unique. It’s not driven by credit risk, but by mismanagement of duration.”

Finsum:With the financial markets showing stress, bond professionals at Franklin Templeton and its affiliates believe that fixed-income instruments provide a safe haven for the current stock volatility.