Wealth Management
UBS Wealth Management Americas posted a small increase in advisor headcount and added $300 million in new assets during the third quarter. Both are the first gains after two quarters of declines. Last quarter, UBS had outflows of $3.4 billion.
The unit posted profits of $307 million, which was $231 million less than last year’s Q3. The bank attributed this to lower commissions as more clients shift towards a fee-based planning model. Another factor is that UBS CEO Sergio Ermotti noted that it doesn’t include interest and dividends when calculating asset growth unlike US competitors. In future quarters, the company will be calculating asset growth in this manner.
In the quarter, advisor headcount increased from 6,071 to 6,142. However, headcount is still down 2% on a year-over-year basis. The company said in part this is due to its recruitment efforts focusing on a small group of high-producing advisors. Ermotti added that the company is resuming growth bonuses for any advisors who add million-dollar clients.
Overall, US brokers managed $1.76 trillion in client assets which was up 16% compared to last year primarily due to asset price appreciation. UBS’ Americas unit is a laggard relative to other geographies within the company and its US-based competitors when it comes to asset growth.
Finsum: UBS posted a small increase in net new assets and advisor headcount. The company is focused on boosting asset growth through the recruitment of high-earning brokers.
Blackrock is the leading company in the $7 trillion ETF market in terms of assets and new issues. According to Dominik Rohe, the head of BlackRock’s Americas ETF and Index Investments business, active ETFs are a category with significant growth potential.
He notes that the boundary between active and passive ETFs is becoming ambiguous as all types of strategies are now being offered with an ETF wrapper. This is leading to more complex and innovative offerings. In 2023, the firm launched 18 active ETFs with more planned for 2024. According to Rohe, active ETFs currently make up 38% of all US-based ETFs with a total of $101 billion in assets under management. And, they are changing the concept of what an ETF can be from a passive vehicle to a ‘technology that will generate active return’ for investors. To that end, it’s launched active ETFs for alpha, specific goals, and strategies.
Another boost for active ETFs is due to the increase in fee-based financial planning and fiduciary wealth management which is leading to the ascendance of model portfolios. These are typically constructed with ETFs with the category growing at a 15% annual rate. Blackrock is forecasting that total assets in model portfolios will exceed $10 trillion by 2027, more than doubling its current level of $4.5 trillion, leading to more demand for these types of products.
Finsum: Blackrock had an eventful 2023 with a bevy of active ETF launches. It sees continued growth for the category with the continued adoption of model portfolios as a key factor.
Northwestern Mutual is expanding its offering of professionally managed investment portfolios. The firm is launching a new category of model portfolios that are accessible to younger and less affluent investors.
The initiative is called the ‘Signature Portfolios Market Pathway’ and requires a minimum investment amount of $5,000. The intention is to create a ‘straightforward approach to investing’ through low cost, diversified and broad ETFs that provide exposure across Northwestern Mutual Wealth Management’s strategic asset classes. There are five types of model portfolios that are available that vary based on risk tolerance. Obviously, the larger goal for the firm is to provide opportunities for advisors to connect with a younger generation of investors who are ready to begin their financial planning journeys.
Northwestern Mutual is positioning itself to appeal to a younger generation and for the major transfer of wealth that is set to take place over the next couple of generations. The company’s average age for an advisor is 39, while it’s 57 through the industry. Currently, it’s the 5th largest independent broker-dealer in terms of revenue, has more than 6,700 advisors, and counts more than $250 billion in assets.
Finsum: Northwestern Mutual is launching a new initiative which lowers the investment threshold to $5,000 to access the company’s model portfolios.
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Macquaire Asset Management, an Australian financial services company with $575 billion in assets and major presence as an operator in the background of the ETF market, launched its first US-listed ETFs this week. Macquaire has previously been involved with ETFs as a custodian, market marker, and advisory firm as well as providing seed capital for other funds.
Now, it’s making a more aggressive move into ETFs in 2023. Earlier this year, it partnered with BondBloxx to serves as a subadvisor to the BondBloxx USD High Yield Bond Sector Rotation ETF (HYSA), which launched in September.
This week, it launched 3 ETFs. The Macquaire Global Listed Infrastructure ETF (BILD) and the Macquarie Energy Transition ETF (PWER) are equity funds offering thematic exposure. It also launched a fixed income ETF - the Macquarie Tax-Free USA Short Term ETF (STAX). STAX invests in tax-exempt US bonds with maturities 1 and 5 years.
This continues a major theme of 2023 which has been the proliferation of active ETFs. Macquaire has also indicated that it plans to launch more active ETFs in the coming years in the US and globally.
Finsum: Macquaire Asset Management is listing its first ETFs. The firm has previously been a player in the ETF space in background roles as a custodian, market marker, advisory, and seeder of funds.
Having a strategy to acquire new clients is necessary for any financial advisory practive to grow and thrive. Yet, there are multiple paths to accomplishing this goal. Some examples are cold calling, digital marketing, in-person networking, etc.
While the tactics can vary, the principles are the same. This entails identifying your target client, figuring out your unique value proposition, and identifying the best medium to reach prospects in a way that is complementary to your personality.
It can also be helpful to spend more time with your existing clients. This will strengthen these connections and increase the chances of getting a referral. These types of referrals have a higher chance of conversion given a stronger foundation of trust. It’s also a reminder that the most important job of an advisor is to build relationships which can only be done by spending time with clients and prospects.
By making financial planning a family affair, you can increase your chances of serving the next generation. This will give you an opportunity to spend time and build a relationship with multiple family members which could ultimately be assets in terms of recruiting, retention, and finding leads.
Finsum: There are many tactics when it comes to landing new clients for financial advisors. However, many successful strategies have some important principles in common.
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