Eq: Financials

Eq: Financials (72)

Tuesday, 20 December 2022 16:08

The job is never done

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Once you walk out the door for the last time – after, of course, knocking out the lights – as a financial advisor, you know your job isn’t really done.

After all, succession planning is a mucho factor to ensure your brand, not to mention your clients, continue to thrive, according to figmarketing.com.

Along those lines, a few important questions to mull toward laying a foundation:

What valuation do you attach to your firm?

An ongoing revenue stream or lump sum payment. Which floats your boat?

Do you envision partnering with your successor to train and guide them, or do you prefer an outright sale?

When it comes to your firm, any heirs whom might be interested in it?

Of course, your departure is among a gaggle of them looking your profession in the rearview mirror. In the next five years, according to a study by Schwab of RIAs and recruitment, 70,000 new advisors will be needed in the financial planning industry – just to keep pace with the burgeoning number of those in the market for input in areas like the purchase of a home and retirement, reported financial-planning.com.

And, hey, the additional planners needed to replace those who retire or leave for other industries aren’t even accounted for in the study.


Wednesday, 14 December 2022 12:27

There’s always an alternative

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Seems there’s plenty of affection for alternatives these days. Yeah; endearing, right? More and more people are holding alternatives closely, maybe, warmly, even, a vivid reflection of an ability to access a deep variety of products like those – not to mention the supporting technology, according to thinkadvisor.com.

Looking volatility squarely in the kisser, advisors are putting the pedal to the metal when it comes to turning to private funds and alternative investments, according to a bi annual survey of 400 financial advisors reported in October by Broadridge Financial Solutions, as reported by prnewswire.com. "Advisors are acutely feeling the need for diversification in their clients' portfolios but remain dissatisfied with the private fund and alternative investment products and resources available to them, largely due to limited availability and restrictive options. Asset managers are not adequately meeting financial advisors' needs, despite an understandable surge in demand against the backdrop of volatile public markets," said Matthew Schiffman, principal of Distribution Insight at Broadridge Financial Solutions. 

"We see this as a strong, long-term opportunity for asset managers to showcase their value by providing product options that meet the growing demand for alternative investments among retail investors."

Wednesday, 14 December 2022 12:23

Model portfolios make the rounds

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The model target segment, it seems, get around. Even without an Uber app. It goes like this: the segment represents 26% of industry advisor asset, with advisors checking in at 46% and advisory practices, 61%, according to fundssociety.com. Yep; spreading the wealth, so to speak.

So, what’s the draw? Well…if you have to ask. That said, if you do, tax efficiency’s among the headline requests for financial advisors deep diving the upside of the portfolios. Particularly noteworthy; 60% of model providers report receiving at least some requests from advisors surrounding this objective.

“This aligns with a broader industry trend regarding the importance of effective tax management as a way to add value to client portfolios,” says Matt Apkarian, associate director. “Advisors want to be able to effectively tax-loss harvest, and to be able to reduce the tax impact of changing investment solutions.”

What’s more, the popularity of model portfolio’s isn’t hightailing it out of doge anytime soon. Along those lines, the clients of advisors should keep an eye on the mail. Eighty two will be the recipients of targeted or comprehensive financial planning services by next year, according to napa-net.org.

Monday, 12 December 2022 06:20

The Bonds that Reg Bi

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The mother lode of sweeps? And, nope, Mr. Bond, it’s nothing quite as clandestine as an undercover patting down of a room for listening devices.

Overactive imagination much, James?

According to fa-mag.com, there’s a gargantuan sweep of multiple states of broker dealers to gain a sense of just how effective their Regulation Best Interest implementation will be completed early next year. 

Last November, violations and, rampant, at that -- centering around retail advice and sales – reared themselves through similar multi state exams, which encompassed 443 firms, the site continued. That was despite the fact that, for more than 15 months, by then, Reg Bi had been in place.

Meantime, someone say “grace period?”

--Yes, indeed, and quite succinctly at that. And the one that pulled up to the station in the aftermath of Reg Bi’s implementation date wound to its conclusion with financial firms starting to face the first round of enforcement actions from regulators under Reg BI, according to stradley.com.

--Reg Bi was earmarked a priority by the Securities and Exchange Commission. What does that mean for firms? Well, it’s incumbent upon them to have in place the right people, processes and technology in place so they’re still in compliance.

Saturday, 10 December 2022 05:42

Retail and direct indexing see eye to eye

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Retail and direct indexing, it seems, forge quite the cozy twosome.

Fueled by clients with assets of between $2 million and $3 million, by 2026, direct indexing will represent one third of retail separate accounts, according to the second annual white paper commissioned by Parametric Portfolio Associates, released by Cerulli Associates, according to financeyahoo.com. Financial advisors were the target.

Assets in directing indexing where projected to expand at a five year CAGR of 12.3% to hit $825 million by 2026, according to the report.

There’s a “gigantic swath of the market” serving these clients who could benefit from such a product due to their tax needs,” said Tom O’Shea, research director and one of the report’s authors. He added that. compared to other investment vehicles like separate accounts and ETFs, the projected rate’s “aggressive.” 

While financial advisors and their clients might not be exactly flocking to direct indexing, the financial services industry’s bent on persuading the financial planning industry that almost every investor can receive a boost from direct indexing, according to investmentnews.com.

Saturday, 10 December 2022 05:39

Many financial advisors ready to bid buh bye

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You know those weekly company zoom meetings? Well, over the next decade, a number of today’s financial advisors will be no shows. What, were they recipients of all inclusive get out of jail cards?

Um, nope. Instead, the bulk of them are in the waning days of their careers and over 100,000 will call it a day over the next decade, according to advisorperspectives.com.

Thing is, only 27% of advisors had a succession plan -- or a formal preparations to transition their practice of an kind – according to findings from a 2018 survey by the Financial Planning Association.

That said, succession planning’s a big decision for financial advisors to keep in mind and generate a plan for, according to figmarketing.com. That way, of course, the brand and your clients will say make hay in the aftermath of your departure.

When it comes to a succession plan, toss the cookie cutter out the nearest window. There’s a host of structures and steps available, of course, to design and plan that will accommodate your specific needs.

Sunday, 04 December 2022 04:33

Some limelight for model portfolios

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Any luck, model portfolios aren’t especially attention adverse. It would help since they, along with technology upgrades and direct indexing increasingly are the cat’s meow among a growing battalion of advisor practices, a recent report found, reported pegasus-one.org.

And, hey, when it comes to model portfolios, take time to peruse the instructions. That’s because, the portfolios, when used the right way, can do a good job freeing up the time of advisory firms, allowing them to dig in more on other responsibilities, according to the findings of “The Cerulli Edge ― US Advisor Edition.”

Model portfolios should give advisors more time to devote to other advanced and financial planning capabilities, Cerulli said.

Among larger advisory firms, model portfolios probably will be adopted for small client accounts with assets on the lower end of the spectrum. That way, the report said, advisors will be able to focus on clients generating nose bleed level numbers. 

A strong catalyst for model portfolio adoption will emerge from the industry’s gradual segue in the direction of a financial planning oriented service, the report stated, according to napa-net.org.



Thought Taylor Swift was all the rage? Okay; fair enough, especially if you ask Ticketmaster.

But she’s going to have to scoot over. In the financial industry, succession planning’s become all that and more, according to diamond-consultaants.com. Not only that, when it comes to the movement of advisors its propelled into a primary driver.

Programs like Merrill’s CTP (Client Transition Program), Morgan Stanley’s FAP (Former Advisor Program), and UBS’s ALFA (Aspiring Legacy Financial Advisor) Program, have been formulated by most wealth management firms. As a result, senior advisors can call it a day in place and the next gen, over time, can assume the reins of the business.

With succession planning, of course, employees are recruited and developed, according to corporatefinanceinstitute.com. The intent: to fill a role – a key one, at that – with an organization. What it does is rachet up the availability of employees who’ve not only been around the block, but competent, to boot. They’re up to the task of supplanting members of the old guard who’ve oh, say, left, retired or passed away.

Succession planning circumvents the potential of creating a hole in leadership in the aftermath of a retirement or departure of an organization’s senior officer.

Wednesday, 23 November 2022 03:40

Change – but hardly simply for the sake of it

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With advisors increasingly turning to model portfolios, it seems the financial product distribution landscape’s in the crosshairs of transformation, according to broadridge.com.

Particularly significant, they’ve had a big time role in packaged mutual fund advisory programs where an advisor hands off discretionary investment management to an internal investment committee/research team at a distributor.

Of course, one size, as you’ve probably heard, doesn’t fit all advisors, broker/dealers and asset managers throughout the industry. Their lights are lit by different factors to leverage model portfolios, the site continued.

Ah, but at the same time, bear in mind that if you’re a, um, control freak, you might want to think twice about model portfolios. Probably do anyway; think twice that is. Anyway, in going with the portfolios, you surrender some control of your asset management, according to smartasset.com. Then there’s the fact that, as with other investments, if you’re looking for a sure thing in terms of performance, forget about it. 

That’s to say nothing of the additional fees tacked on with model portfolios that would be a non issue if you selected investments on your own. 

Wednesday, 23 November 2022 03:38

Active management right at home – no matter where

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Well, active management fits the bill in any environment, according to Nuveen.com, according to whom actively managed bond strategies can play a part in managing portfolio risk while abetting returns. Not a bad thing, it pointed out, especially these days, with percolating interest rates.

Mike Gitlin, head of Fixed Income for Capital Group, said: “Now is a good time for financial professionals and investors alike to consider active fixed income ETFs. We’ve deliberately built our three new active ETFs in categories that have historically been underserved by active ETF managers. We believe these will help investors manage short-term cash needs, generate tax-exempt income, and benefit from some of the best starting yields we’ve seen in credit in years.”

You might say today’s market conditions have been less than idyllic for fixed income investors. Might you? Anyway, at the same time, investors in equities are on the hunt for bonds to offset stock prices headed the wrong way, according to thestreet.com. Still, with planning and a grasp of available options, investors can find traction in bond markets that are transitioning.


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