Wealth Management

For AdvisorHub, Holt Hackney interviewed Kimberly R. Nelson, an advisor at Coastal Bridge Advisors, on the factors behind her success, and what makes her practice unique. Nelson was ranked #5 on AdvisorHub’s Top 100 RIAs to Watch List and credits her success to using empathy to understand the emotions that are driving the behaviors and actions of her clients. 

 

Nelson is an empath which means she can intuitively empathize with her wealthy clients. Despite having wealth, her clients still face the same challenges as others along with additional complications. 

 

Empathy helps her connect with her clients and provides support and resources when it’s needed most. She’s also pioneered serving female clients after divorce who may find themselves with a windfall but no professional network to help them manage this money. 

 

In terms of her investing philosophy, she believes that quality assets will provide value to a portfolio and outperform in the long-term. She believes that her job is to ‘shepherd’ her clients through periods of volatility and recommends diversified asset allocation and a well-constructed financial plan that reflect the needs and concerns of the clients. 


Finsum: Kimberly R. Nelson is an empath, and she attributes this to her success as a financial advisor. 

 

Stephen H. Dover, the Chief Market Strategist of Franklin Templeton, shared his thoughts on the rise in bond yields, and whether it should be feared. Higher yields do push up borrowing costs for corporations and households. 

 

And as long as yields stay elevated, global growth will be lower, profit expectations are squeezed, and there is greater risk to equities and credit markets. However, Dover attributes most of the increase in yields to rising term premiums rather than inflation or increased supply.

 

Term premiums are the additional yield that investors demand to hold onto longer-duration securities. Long-term rates are composed of 3 factors - inflation expectations, the neutral short-term interest rate path, and term premium. 

 

Since mid-July, the yield on the 10-year has advanced by more than 100 basis points. In contrast, the yield on the 2-year note is only up about 35 basis points over the same period. Notably, inflation expectations have moderated during that time frame as well, indicating that term premiums are to explain the surge in long-term yields. 

 

A major reason for the rise in term premiums is the removal of the ‘Fed put’ of the past decade, when central bank intervention was a constant through asset purchases and forward guidance. Overall, increased risk and volatility for long-duration bonds mean that investors need to be paid higher yields. 


Finsum: JPMorgan shared its Q4 fixed income outlook. Its two base-case scenarios are a recession and a period of below-trend growth. 

 

In a CNBC interview, CAIS CEO Matt Brown commented on the alternative asset market. He believes that a major factor behind the current growth of the category is due to increased access, highlighting venture capital, hedge funds, private real estate, and private equity. 

 

He forecasts that alternative exposure will continue to increase among investors and advisors along with greater access. He also believes that the traditional 60/40 portfolio will shift and become a 50/30/20 mix between stocks, bonds, and alternatives. This reallocation will result in $10 trillion moving into alternatives over the next few years according to Brown. 

 

CEO Rob Sechan of NewEdge Wealth also added that alternative investments provide diversification and a better chance of achieving targeted returns especially in an environment of falling returns for stocks and bonds. 

 

He believes that consistent private market performance is due to greater operating and financial leverage while public securitie performance is too economically sensitive. Investors in private markets are also able to take advantage of dislocations in public markets by buying discounted assets with a long duration during selloffs. Recent examples include the European debt crisis and Silicon Valley Bank. 


Finsum: Alternative investments are becoming a major asset class and increasingly a larger allocation for some investors and advisors.

 

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