In the U.S. the predominant view on custom/direct indexing is that it serves as a vehicle to tax-loss harvest, but overseas could be shaping the future of this innovative new product. In the U.S. the tax code lends itself to these features, but Euro area tax laws vary so differently, custom indexing is being pitched more as an impact investing tool. This has real use cases specifically for targeting greenwashing. Greenwashers rig the system to benefit from favorable lending policies when they may have no business really being a green energy company. While some amount of impact investors are piggy backing on these good environmental scores to gain return, many new investors like millennials are interested in seeing their dollars actually impact environmental progress. An empowered group impact investors can eliminate ‘greenwashers’ from their custom index, which could lead to fundamental change in custom indexing.

Finsum: While the future of custom indexing products is vast ESG has some of the best potential because investors can call their bluff.

If you’ve had a bit more concern about the economy and your financial portfolio recently, then you’re far from alone. With ongoing market tumult and surging inflation, it’s reasonable to wonder what the future holds for your finances.

The SEC is planning to beef up its Reg BI enforcement for the rest of the year. The SEC put out a recent bulletin focused on Reg BI compliance and the role that brokers and advisors play in the process. The tone was about how brokers and advisors need to take more responsibility into their own hands regarding compliance. Additionally, more focus and guidance on rollover recommendations is in the pipe, said the SEC. More bulletins on the topic are expected soon.

FINSUM: Rollovers are obviously a major topic for advisors, so this will be closely watched and scrutinized by the wealth management community.

Emerging market debt could be in trouble according to JPMorgan. With a seemingly never-ending Russia-Ukraine crisis as well as rising borrowing costs low grade emerging market debt could be in trouble. A note said that almost half of the sample of the 52 countries are carrying high repayment risk. Generally speaking, spillover risk is high if Russia defaults and Ukraine has to res-structure. All of this is compounded by rising yields which makes repayment even more difficult.

Finsum: For those looking for solutions to rising volatility be careful chasing emerging market debt as a response.

Volatility is pervading markets and many advisors may have new clients or millennial investors who haven’t experienced this volatility before. A study from McKinsey showed that trust with an advisor is highly correlated with the amount of communication with advisors. Outsourcing financial news, posts, and blogs are a way to not burn clients out. Also, you can give different avenues to communication such as emails as well as social media. Themes can also help concentrate your message and lead to better takeaways. Managing expectations in uncertainty and making sure your clients feel their goals are being addressed are crucial.

Finsum: A little communication goes a long way and investors need to understand how their portfolio is adapting and performing in high volatility.