FINRA has issued its first disciplinary action related to Reg BI. The regulatory authority levied a $5,000 fine and a six-month suspension on a broker for allegedly causing their client to pay tens of thousands in commissions on an account of less than $30,000. It is the first time FINRA has taken action against a broker for alleged violations of the SEC's Reg-BI fiduciary rule. Charles V. Malico, who worked for Network 1 Financial Securities at the time of the violation, accepted and consented to the agency’s findings without admission or denial. According to findings, between July 2020 and November 2021, Malico violated Reg BI when he recommended a series of trades in the account of a retail client that was considered excessive based on the customer’s investment profile. Therefore, his actions were not in the client’s best interest. Making matters worse, Malico allegedly recommended that his client buy and sell a security, only to repurchase the same security days or weeks later. FINRA was made aware of the broker’s conduct through a review of a customer-initiated arbitration. The arbitration, which is still pending, stemmed from a Dec. 6, 2021 customer complaint that alleged negligence, breach of fiduciary duty, and negligent supervision. 

Finsum: In its first disciplinary action related to Reg BI, FINRA levied a $5,000 fine and a six-month suspension on a broker for not acting in the best interests of his client.

According to a new PwC survey, eight in 10 investors plan to increase their exposure to ESG strategies over the next two years. PwC’s Asset and Wealth Management Survey, which was part of its Asset and Wealth Management Revolution 2022 report, is a global survey of asset managers and institutional investors. The survey sample included 250 respondents, accounting for a combined asset under management of approximately $50 trillion. The survey also revealed that asset managers are expected to increase their ESG-related assets to $33.9 trillion by 2026, up from $18.4 trillion in 2021. ESG-related assets are expected to grow at a much faster pace than the asset and wealth management market as a whole. ESG assets in the US are expected to more than double from $4.5 trillion in 2021 to $10.5 trillion in 2026, while Europe ESG assets would increase 53% to $19.6 trillion. However, as demand for ESG products rapidly increases, 30% of investors say it’s a struggle to find attractive and adequate ESG opportunities due to a lack of consistent and transparent standards.

Finsum: A recent PWC survey revealed that 80% of investors are expected to increase their exposure to ESG over the next two years, while assets in ESG products are predicted to hit $33.9 trillion by 2026.

Sure, among investors, passive investment strategies still can yield exposure to broad market data, according to wellington.com. 

Yet, for skilled active management, the new regime today, which is comprised of inflation and interest rates pointing north as well as an acceleration of dispersion across fixed income sectors and regions, is custom made for skilled active management, the site continued.

Considering that, among investors, the time now be just right to opportunistically position their portfolios.

Now, given the rebound of inflation’s largely a global matter, you might want to put the cookie cutter away. In Europe, inflation’s being fueled by catalysts that vary from the issue in the U.S. Distinct structural headwinds face each region – a divergence that, for investors, sparks possible opportunities.

In Europe, well, climbing inflation’s stems mainly from energy and food prices unfavorably tipping the scale. The spiraling price tags of these staples have been absorbed by businesses and consumers. Meantime, In the U.S., demand, more so, has been the impetus of recent pressures driven by inflation.

Their respective fixed income markets have priced in the duo threats of recession and sources of inflation in the euro area opposed to the U.S.

The brunt of the changes in interest rates potentially can be minimized through the active management of sensitivity to interest rates with duration positioning, according to gsam.com. Blunting sensitivity to rates changes could usher in positive returns in any rate environment.