Eq: Financials (114)
Seems this wasn’t one of those prototypical meetings convened simply to discuss when to gather to conduct the next prototypical meeting. Ya da and Ya da.
Banking industry leaders from Grant Thornton recently gathered to chew over what prompted volatility to flare up and its impact on not only financial institutions, but the economy as well, according to grantthornton.com.
The one two punch of a lack of liquidity and asset liability management that wasn’t cutting the muster was at the root of the ills. The current environment has stirred plenty of uncertainty. Also deal in the Silicon Valley Bank run and the shuttering of Signature Bank, not to mention the wider sell off of stocks that unfolded at other institutions.
Meantime, typically, it might be sunny there, but in Miami-Dade County, employment in financial activities is burgeoning at a slower rate than last year, according to miamitodaynews.com. In fin-tech companies, prompted by the financial sector’s volatility, jobs are headed south.
The load down: in South Florida, jobs in financial activities climbed by 3.3% from March of last year to March of this year.
The tickets are going fast.
Must be a rock star in the house. Though not demanding bowls brimming exclusively with red M&Ms, of late, model portfolios have become all that and more, at least as far as some financial professionals are concerned, according to tifin.com
And, hey, they’re onto something. Besides salting away mucho time for investors, giving them all the opportunity to serve more clients with stepped up efficiency, they also play a pivotal role in their ability to ensure investment strategies remain on track throughout the client bases. What’s more, they make sure overexposure to any particular investment or asset class doesn’t burgeon into an issue.
Target risk models are a staple among a plethora of model portfolio types. Among several attributes, they’re designed to align with the goals of investors, who have specific risk tolerances. The range stretches from conservative to aggressive.
So, how popular are they? As of March of last year, assets following model portfolios hardly sat on their hands; they parachuted to $$349 billion, according to Morningstar, reported smartasset.com. That’s an approximately 22% bounce between June 30, 2021, and March 31, 2022.
Unless you can score a gig on, oh, say, MSNBC, as did a certain Donnie, developing a brand as a financial advisor isn’t exactly as simple as snapping your fingers. In fact, it can seem like the motherlode, according to lpl.com.
After all, there are myriad things that need to be nailed down, like choosing a name and landing on a brand logo. Compounding matters, if initiatives like these aren’t quite in your wheelhouse, well, it can be all the more daunting.
To find your mojo, below are a handful of basic steps:
- Define your value proposition
- Pick your DBA name
- Develop a logo
- Develop a Website
- Execute with Consistency
Meantime, did someone say social media platforms? They can be leveraged by financial advisors to expand their business, according to mediaboom.com.
Advisors can share content that not only forges a community but can abet your ability to build trust with your audience. The trust of current and potential clients is gold to financial advisors, which is a good idea to foster considering you’re behind the wheel of the finances of others as well as their long term wealth.
Private equity: you have a meeting with center stage.
With the space -- as well as other alternative investments -- expected to gross $20 trillion by 2025, it’s thumbs up for the expansion of private equity, according to an industry data report from Prequin, an alternatives data firm, reported daily.financialexecutives.org.
Within the past decade, the private equity terrain’s changed seismically. What’s more, the industry’s lighting quick expansion is paving the way to a lucrative market, leading to new leadership.
Meantime, last year prompted investors to pick the minds of their financial professionals for help making their way through the constantly changing financial landscape, according to thestreet.com.
While a survey conducted by the Financial Planning Association and the Journal of Financial Planning showed the interest in alternative investments was stronger among professional predating the pandemic, the issues of liquidity and cost didn’t vanish in the wind.
"As traditional stock and bond asset classes suffered from losses and volatility in 2022, it's not surprising that interest in alternative investments increased among financial professionals,” 2023 FPA President James Lee, CFP, CRPC, AIF, said in a press release. “However, overall use of alternatives remains relatively low,”
Jamie Dimon, JPMorgan Chase C.E.O, has his eye on the road. Significantly down the road.
While he’s expected to outline his plans for the bank for years down the line, according to the New York Times, when it comes to the issue of who his successor will be, he’s likely to encounter questions anew.
While he’s not expected to climb down from the saddle anytime soon, the issue could rise to the surface among shareholders once again in light of succession plans at two rivals of JPMorgan. At Morgan Stanley, James Gorman recently announced he planned to step away within the next 12 months, while there are reports that Ken Jacobs, CEO of Lazard, is prepping to depart.
Meantime, whenever he decides the time’s right to hit the exit, Dimon will do so with considerably more than a gold watch. If he’s in his current position in 2026, he’ll pocket an additional $50 million payout, according to the site.
Speaking of which, in terms of compensation changes around the big boys of broker-dealers – save for a few exceptions among some of the regional national firms – the year, it seems, is destined to be relatively quiet, according to financial-planning.com.
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A little forward thinking, anyone? Surely, now, there must be some…
Either way, as reported in a Global Market Insights Inc research study, by 2032, it’s anticipated the alternative financing market valuation will surge past $40 billion, according to globenewswire.com.
The trigger? The financial industry’s been revolutionized by grease lighting strides in tech – especially fintech. Borrowers and investors have been in the position to link up directly, with no use of intermediaries. You can attribute that to alternative financing platforms taking advantage of technology to dispense services that are efficient and user friendly.
Furthermore, from anywhere – and at any time -- borrowers and investors can take part in alternative financing transactions fueled by the popularity of online platforms and mobile apps, according to hk.finance.yahoo.com.
Industry trends also are being cultivated by regulatory frameworks set by governments and financial authorities.
Seems the referee threw a flag.
Between January 2018 and December 2021, SW Financial, based in Melville, New York, and the co owner of the firm, Thomas Diamante, made material misrepresentations, neglecting to include material information linked with the sale of private placements offerings of pre-IPO securities, according to thinkadvisor.com. It was a duo violation; of FINRA rules and Reg Bi’s Disclosure Obligation as well.
According to Reg Bi’s Disclosure Obligation, it’s incumbent upon broker dealers – as well as those associated – to provide investor clients, “with full and fair written disclosure, prior to or at the time of a recommendation, of all material facts relating to conflicts of interest associated with the recommendation,” as spelled out by FINRA.
Although it’s FINRA’s maiden expulsion, it’s not its first enforcement action evolving around Reg Bi, which has been around since 2020, according to the National Review.
By year’s end, FINRA pronounced, compliance examinations of 1,000 broker-dealers would be conducted.
Loose lips can, um, wreak havoc on ships.
In your branch, most advisors shouldn’t know squat about your plans; after all, they’re not buddies of yours, but competitors, according to thinkadvisor.com.
If you’re cutting the cord and bidding a non protocol firm adieu, it’s important for you to buckle down and closely abide by the prospective firm’s instructions.
In the world of missteps, a gaggle them can add significant difficulty to your transition:
Failing to Play by the Rules
Being Clueless About the Transfer Process
Taking Your Eye Off the Ball
Not Staying in Front of Clients Prior to Your Move
Meantime, you know the money? Well, follow it.
Probably not a badly conceived plan considering the consolidation on the part of Phoenix based Advisor’s Group of its network of eight brokerages into one translates into challenges, according to financialplanning.com. Those obstacles stem from the flow of thousands of financial advisors and assets work billions of dollars.
With more than 10,500 financial advisors and $490 billion in client assets, the firm will shift them to a rebranded company with a spanking new moniker, according to a report earlier this month by Moody's Investors Service.
Your table’s ready, direct indexing. The food’s hot, the beverages refreshing cold.
What else would you expect, considering that in the financial industry, direct indexing’s all that and more – as in the next big thing, according to comparebrokers.co.
Who’s it idyllic for? Those who are calling it a day in the workforce. Under those circumstances, they can unload holdings that impact taxes the least.
If you want to separate yourself from your peers, direct indexing strategies could be your answer, according to advisorperspectives.com.
They can dispense tax effective ways to manage any cash windfalls that might be on the horizon among high net worth investors. Not only that, they can shore concentrated stock positions.
In a recent interview at IMPACT, Daniel Needham, president of Morningstar Wealth Management Solutions, said his firm considered direct indexing an “important investment option for advisors to be able to deliver great advice to their clients.
“That’s the primary reason we decided to enter the market,” said Needham. “We think that direct indexing is a good way for clients to be able to have their financial capital personalized, including their values, beliefs and preferences, as well as to be tax-managed for a lot of households. Tax management should happen for every household.”
For what could be a host of reasons, your firm has an opening. Perhaps a facelift in executive leadership?
Well, you could try Indeed,
First, though, ask yourself: should you fill the gig from the inside or out? Sure, if you stick with your internal resources, he or she already knows the company – and your business, not to mention its clients and team, according to selectadvisorinstitute.com. That said, some from the outside could arrive with fresh ideas.
Factors to keep in mind when considering going outside:
Internal employees may lack the leadership ability
It’s time for a shake up
Removing top talent from the competition
As for remaining inside:
Save time and money
Your firm is already on the right track
Retention and morale
During the first quarter of the year, Avantax reported more than $228 million in newly recruited assets, according to globenewswire.com.
That’s in light of sustained interest on the part of independent financial professions and accounting firms intent on expansion.
More...
Calling Donnie Deutsch….calling Donnie Deutsch.
Line, um, two. Go ahead.
Good thing, too, because, like a vigorous workout, developing a brand -- from pinpointing a name to a logo, can almost feel as if it’s pushing you to your limits What’s more, if branding and marketing isn’t in your DNA, the challenge is magnified, according to lpl.com.
Your creative chops aside, to build your financial practice, your best bet’s a methodical approach:
- Define your value proposition
- Pick your DBA name
- Develop a logo
- Develop a Website
- Execute with Consistency
Brand equity, of course, is the gauge of the perceived value of a brand name product, according to quatrics.com.
Nurture yours – because it abets your ability to squeeze more out of profit margins.
Brand equity is defined by the added value associated with a brand name that rings a bell among those who hear it. In fact, when it comes to brand loyalty, it’s all in. That’s not all; it can help ascertain pricing.
Fixed income: yer up.
While it was hardly a go to when rates were south, they’ve rediscovered their mojo, with a hefty infusion of capital, according to prominent investors at a recent major industry conference in Beverly Hills, reported money.usnews.com.
Fund managers at the Milken Institute Global Conference said among popular products are bond funds.
So, what’s going on? Well, given the uncertainty over interest rates, a potential recession and U.S. debt default, stocks and real estate are getting the cold shoulder.
"Things are very different now," said Elizabeth Burton, a managing director and client investment strategist at Goldman Sachs.
"You get a good sense of consensus at these conferences," noted Katie Koch, president and CEO of investment firm TCW. "And I think people are still feeling a little too good."
Heading into the second quarter, Principal Financial Group indicated there were opportunities for investors in fixed income; that is, if they’re up to brooking rocky times in the short run. The tradeoff? Results in the long run, according to seekingalpha.com.
Financial practices have an opportunity.
And it’s golden.
According to Tim Gerend, executive vice president and chief distribution officer at Northwestern Mutual, his firm’s annual Planning & Progress Study found that more than half of U.S. adults are anxious about their finances, reported thinkadvisor.com. This was part of remarks he made at the recent 2023 LIMRA Distribution Conference in Orlando.
On top of that, as for their financial future, they feel far from certain.
Fortunately, to help them prop up their security, Americans embrace the idea of seeking the help of financial advisors to help them formulate financial plans.
While that means the opportunity is ripe for the industry to build its impact and assist those who need it, Houston, we have a problem: the dearth of financial professional to handle the load.
That said, advisors should bear this in mind: If they’re not leveraging social media, you have company according to blackrock.com.:
Forty four percent of financial advisors don’t indulge. Okay, so that might not prevent you from succeeding, ask yourself a question: how will your growth remain on track given that among young investors, social media’s their “go to” when considering and choosing financial professionals among service providers.
Be a pal, huh, and give it a little elbow room. Fueled by institutions and financial advisors intent on seeking to tailor traditional indexes to meet the preferences of beneficiaries, direct indexing’s growing – and quickly – according to al-cio.com.
While direct indexing isn’t exactly new to the rodeo, its use has been spurred by current day computing power, according to a report by Jason Kephart, Morningstar’s director of multi-asset ratings, and his team.
Now, keep in mind, it’s not only your clients with the greatest wealth and complex investment portfolios who should be riding the direct indexing bandwagon, according to Randy Bullard, global head of wealth at Charles River Development, reported investmentnews.com.
“I think every financial advisor should be accessing direct indexing for their taxable client accounts,” Bullard said at the recent ETF Exchange conference in Miami.
“A direct indexing solution is uniquely designed to catch money in transition, and it’s suitable for all types of investors,” he said. “That’s the transition the industry is starting to go through. Once you conquer the operational complexities of direct indexing, it becomes a broad market solution.”