Financial technology platform 55ip reached new records for platform adoption, custom models, tax savings, and company growth last year. The 2022 tax savings benefit for model portfolios of ETF and Mutual Funds was a record 2.70% (2.66% when annualized since 2020). In addition, market-driven demand helped increase the number of advisory firms on the 55ip platform by more than 50%, to 234 firms, which represents $234 billion in discretionary assets under management for 2022. Individual advisors that partnered with 55ip grew by 122%, while the growth of custom models on the platform increased by 134% from 2022. They now comprise 45% of all assets on the 55ip platform. The demand for personalization among advisors also increased, which led the firm to significantly increase the output of custom models. Paul Gamble, Chief Executive Officer of 55ip, stated “We’re incredibly proud of the increased value we provided last year to our clients. The growth we experienced demonstrates that our value goes well beyond tax savings benefit to investors, which reached an all-time high last year. We doubled our trade volume last year as well, completing more than 1.8 million trade orders on behalf of our advisors. That translates to more than 500 hours in time saved for each firm using our platform – a benefit that is invaluable to advisors.”

Finsum:The demand for personalization among advisors increased last year, which led 55ip to significantly increase the output of custom models while driving new records for platform adoption, custom models, tax savings, and company growth.

According to Man Group boss Luke Ellis, investors should get used to volatility in the markets. Last Tuesday, Ellis predicted inflation will remain high because of strong wage growth in much more volatile markets. He stated, “It will take a lot of years before inflation is put to bed again. We’re in a different paradigm.” He added, “The base effects are running out and we still have very significant wage inflation. It’s not squeezing services [sector] wage inflation, and services is such a big part of the economy. You can’t get consistently to [a] 2 percent [inflation target] when you have 6 to 7 percent wage inflation.” Ellis also said that he did not believe stocks had yet bottomed out. He compared the current environment to the 1970s when the real return from equities after inflation was about zero. His comments come as U.S. stocks fell in February with investors growing concerned that the strength of the economy might require higher interest rates, and the Fed’s preferred measure of inflation rose more than expected in January. In addition, both France and Spain also reported a rise in inflation, beating forecasts.

Finsum:Man Group boss Luke Ellis predicts inflation will remain high due to strong wage growth in volatile markets.

According to a Cogent Syndicated report from Escalent, advisors are not optimistic about the future of ESG investing partly due to growing political tension. Last year, 58% of advisors used ESG investments, down 10 percentage points from 2020, according to the Livonia, Michigan-based firms survey of over 500 financial advisors in September. In addition, only 15% of advisors who used ESG agree with its importance, while the majority of advisors don’t think ESG investing is a significant factor in attracting new clients. As part of the report, Linda York, a senior vice president in the financial services research division of Escalent, stated, “In the past six months, the topic of ESG investing has become even more divisive as political tensions rise. With firms suffering public backlash from using what many call ‘woke’ investment strategies, many advisors are waiting for clarity from regulators before using ESG investments. Increased supervision from federal or state legislature with added qualifications and reporting can only help in terms of ESG becoming more popular among advisors and investors alike.” In examining the reasons for the growing tension, Escalent said that advisors were concerned by the inconsistent definitions and perceived negative public sentiment of ESG.

Finsum:Based on the results of a recent report from Escalent, advisors are not optimistic about the future of ESG due to inconsistent definitions and perceived negative public sentiment.

First Republic Bank’s recruiting spree is paying off with the recent announcement that the bank nabbed a Morgan Stanley team managing $1.2 billion in assets for ultra-wealthy clients in Los Angeles. The six-person team is led by advisors Alexander H. Kadish, Nicholas Davey, and J.P. Garofalo, who generated a combined $9.2 million in revenue. The team, which specializes in helping executives with large corporate stock plan holdings, also moved with three support staff. In addition, another former member of their team, Robert A. Daly Jr., will continue to work with the team as an outside consultant. Daly and Kadish moved the team to Morgan Stanley in 2016 from J.P. Morgan Advisors. Kadish has worked at six firms over his 21-year career. He started at discount broker Banc of America Securities in 2001, then shifted to Smith Barney in 2003 and worked for Jefferies & Co before joining J.P. Morgan Advisors in 2010. Daly started his career at J.P. Morgan’s Bear, Stearns & Co. in 1998 and also worked at UBS Wealth Management USA before rejoining J.P. Morgan in 2009. Garofalo started with Wells Fargo Advisors in 2013 and has worked for Morgan Stanley, Ares Investor Services, and Nuveen Securities before returning to Morgan in 2020. The addition of the team brings First Republic’s 2023 recruiting total to four teams managing a combined $4.6 billion in assets.

Finsum:First Republic Bank lured away a $9.2 million team from Morgan Stanley bringing its recruiting tally for 2023 to $4.6 billion in assets.

Is there a little something something between bonds and James Bond?

Well, bonds, at least, are expected back this year, according to schwab.com. 

James? Filming a movie somewhere. Yeah, yeah; unreliable as ever.

Thing is, in the aftermath of an extended period of low yields -- not to mention last year’s to eagerly forget price dip, three tries at what’s on the precipice of a comeback: returns in the fixed income market, according to the site.

So, why so upbeat about returns? It goes like this:

Both nominally and in reality, starting yields are the highest in years;

The bulk of the Fed tightening cycle has wrapped up; and

A deceleration of Inflation’s likely

Following a prolonged dry spell, the bond market’s replete with yields that – compared to other investments – are appealing. A portfolio consisting of bonds; and high quality at that, like Treasuries, can translate -- without an excessively long period – around 4% to 5%.

Bonds, explained Ted Stephenson, professor of Accounting and finance at George Brown College, continue to be part of a diversified investment portfolio – an indispensable one at that, according to usnews.com.

"Regardless of correlation, bonds have done well versus stocks in six out of seven historical recessions. Ultimately, the correlation between stocks and bonds is not as important as relative performance."