Displaying items by tag: advisors

(New York)

ETFs have been the dominant investing trend for the last half decade or so, eating away at mutual funds’ grip. However, what will be the next major investing trend? The answer may have just debuted. Orion Advisor Services has just announced a new product called ASTRO (Advisor Strategy & Tax Return Optimization tool). ASTRO “allows advisors to build tax-efficient SMA portfolios that can take into account clients’ environmental, societal and governmental concerns”, according to Michael Kitces, who says that the new technology is a threat to asset management and could prove highly disruptive, as it would allow better loss harvesting and more tax-sensitive liquidations in retirement. The system would allow advisors to “buy, own and manage a portfolio of all the underlying individual investments directly”.

FINSUM: This sounds like it could be a very potent offering, but we do not expect ETFs do go away any time soon.

(Washington)

InvestmentNews has done a broad survey of US financial advisors’ views of Trump and the results are in. The survey was of 745 advisor readers of the site and the study found that Trump was more popular among advisors than the general public. 50% of advisors approved of Trump while 44.8% disapproved. This compares to 39.9% and 55.6% amongst the general public. However, many advisors said they approved of Trump from a financial perspective but disliked his overall behavior.

FINSUM: We are uniquely placed to comment on this given all the reader feedback we get. We would say that, if anything, this poll discounts the president’s support amongst the advisor community.

(San Francisco)

If you were an advisor at Wells Fargo who wanted to move to its independent arm you would face a big barrier—a so-called “tax” on compensation for two years. The tax was faced by brokers who wanted to move to the Wells Fargo Advisors Financial Network, or FiNet. The system is unique among brokers in that it lets brokers go without Wells Fargo totally losing them. However, the two-year tax on compensation was a big barrier. Now, the bank is considering getting rid of the tax so long as advisors sign a two- to three-year contract to stay at FiNet.

FINSUM: This seems a smart move to us as the tide of advisors going independent is only going to grow stronger.

(New York)

Speaking at a large ETF conference yesterday, the head of Vanguard has a big warning for all advisors. He said that the industry needs to change rapidly or face a huge loss of jobs. Citing evidence that almost 60% of advisor jobs may be lost to automation. He argues that portfolio construction and rebalancing are now super cheap commodities and that advisors should instead focus more on managing client behaviour, which will be a continued niche.

FINSUM: This was a pretty grave warning for advisors. We are not sure the outlook is so bleak.

(New York)

Like Morgan Stanley, Merrill Lynch is in the middle of a big bet on its wealth management unit The broker has decided to focus less resources on hiring senior advisors and more on training younger staff. Accordingly, its staff costs have shrunk despite growing its advisor base by 2%. By some accounts the early signs for the experiment are good, but it will take a long time to see how well it plays out.

FINSUM: The whole industry has a bit of an inheritance problem right now, since there are herds of baby boomer advisors who are set to retire in the coming years, and as yet, a dearth of young advisors to take their places.