Displaying items by tag: margins

Tuesday, 20 March 2018 10:18

Small Advisors May Not Survive a Bear Market

(New York)

Advisors large and small need to worry about this next bear market, as the latter may not survive, according to Barron’s. The reality is that there are many small RIAs who have kept their business alive because of the long bull market. However, “The smaller you are, the more vulnerable you are, because if the market goes down 15%, it gets harder and harder to run a business”, says Fidelity’s clearing division. Margins are already quite slim for small RIAs and lower AUM from market losses would likely kill many businesses. “When the stock market drops, revenues drop, and no expenses immediately come out of the system”.


FINSUM: The big question is whether RIAs who feel vulnerable should perhaps try to sell to larger players now instead of risking a bear market.

Published in Wealth Management

(New York)

Most of the market’s panic over retail centers on the threat from Amazon and the shift to ecommerce from brick and mortar (admittedly related threats). However, there is more out there to be worried about than just those. In particular, the apparel market is not growing very quickly, as it is losing market share to other areas of consumer spending, such as restaurants, entertainment and wellness. Staffing costs are also rising at the same time as price pressure is growing, putting a strain on margins.


FINSUM: Amazon’s growth in apparel sales is also well-outpacing the overall industry’s growth rate, which means it is already stealing market share on top of these other challenges.

Published in Eq: Large Cap
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