Eq: Financials (114)
Last year, transitions among financial advisors lost a little ground, according to Investnews.com, reported linkedin.com.
But, tada, independent broker-dealers picked up almost 1,000 advisors in 2023.
The morale of the story? The volume of transitions is secondary; in the world of recruitment, what reigns supreme is lassoing top producers capable of expanding the business.
Up to date technology’s one way snag advisors.
One word to capture technology’s role in drawing fresh talent: “significant,” according to Jim Frawley, CEO and founder of Bellwether.
“Good technology is a game changer and committing to the tech of the future will be very attractive to those being recruited,” said Frawley. “This includes adopting certain aspects of AI and automation and at least being open to investigating other opportunities to free up time and elevate them. Advisors today are looking at tech to make their offering more attractive and substantial. Tech is also becoming their biggest competitor.”
And you might say recruiting pays off.
For example, leveraging its organic recruiting initiatives, during this year’s first quarter, Cetera Financial Group layered on nearly $3 billion in assets under administration, according to thinkadvisor.com.
You strategize, financial advisors.
According to Fidelity Investments, the portfolios they’re putting together for clients reflect not only swelling caution but returning to diversification globally, reported investmentnews.com.
“This isn’t just about moving to cash when you sense trouble, we’re seeing allocations dialing up safety within the individual asset classes,” said Mayank Goradia, head of investment product analytics and strategy at Fidelity Institutional.
Among items that rose above the pack in Goradia’s report: a 32% average allocation to fixed income across all the model portfolios. That’s the highest level since the first quarter of last year.
Meantime, here’s a regular Rubik’s cube of a process for you: turning the financial portfolio of a prospect – or existing client – to the recommended investment strategy, according to advent.com.
Hardcore diligence oversight along with the right tools, constraints – such as taxes and restrictions – can at least temporarily put the process on ice and, over time, take a portion of the client base off-model. The result: performance dispersion like investment goals.
With the waters of volatility in the banking sector taking five – or, perhaps, 10 – the market’s turning its sights to some incomplete biz: disinflation, according to swissre.com.
Due to “decisive government and central bank actions,” what might have ballooned into a systemic financial sector crises – on both sides of the Atlantic, at that -- which would have put a damper on merging markets, was sidestepped. But stemming from stubborn core inflation pressures and tight labor markets within advanced economies, in May, the Fed and European Central Bank’s expected to hike policy rates.
Meantime, call it a game of adjustments.
In the first quarter, Gateway, which is focused on low-volatility equity investments, made adjustments in its portfolio, according to barrons.com.
The low down: it wielded the scissors, shoring its stake Apple stock and putting the old slash on its General Electric investment. At the same time, it purchased Altria Group stock (MO). The stock trades – as well as others -- were disclosed by Gateway in a form it filed with the Securities and Exchange Commission.
Third party strategists life of financial industry party
Written by FINSUM
The financial industry’s not just casually tweaking its monthly expense reports and watching things unfold.
Nah uh. As it sachets toward holistic wealth management and “goal based” planning, the industry recognizes the importance of acquiescing asset management to third party strategists has mounted, according to wealthmanagement.com.
In two step with that escalating need is spiraling opportunities to accomplish that mission. While within the largest firms, already advisors can access model portfolios, now, their counterparts have more options.
And, hey, model portfolios tout more than a few advantages.
For example, there’s ease of use. “Model portfolios can be used as a complete solution for investors that prefer a hands-off approach to achieving their investing objectives,” said Colby McFadden, CEO of Quiver Financial, an Investment Advisory Firm in San Clemente California, according to forbes.com.
“Model portfolios can be used as a complete solution for investors that prefer a hands-off approach to achieving their investing objectives,” said McFadden.
Another: diversification. The need for a thick wad of money to pluck down on multiple asset classes? No need, noted Mark Kennedy, president of Kennedy Wealth Management in Calabasas, Calf. Some can have a minimum as low as $10,000 to start.”
Up and up she goes: acquiescing asset management to third party strategists
Written by FINSUM
The financial industry’s not just casually tweaking its monthly expense reports and wolfing down popcorn, watching as things unfold, you know.
On contraire. As it sachets toward holistic wealth management and “goal based” planning, the industry recognizes the importance of acquiescing asset management to third party strategists has mounted, according to wealthmanagement.com.
Meantime, the need to accomplish that mission is spiraling. While advisors within larger firms already can access model portfolios, now, additional options are available to their counterparts.
And, hey, model portfolios tout more than a few advantages.
For example, there’s ease of use. “Model portfolios can be used as a complete solution for investors that prefer a hands-off approach to achieving their investing objectives,” said Colby McFadden, CEO of Quiver Financial, an Investment Advisory Firm in San Clemente California, according to forbes.com.
Another: diversification. The need for a thick wad of money to pluck down on multiple asset classes? No need, said Mark Kennedy, president of Kennedy Wealth Management in Calabasas, Calf. Some can have a minimum as low as $10,000 to start.”
Medium term outlook for fixed income unfazed by volatility
Written by FINSUM
Recent volatility in the financial market? Sure enough. Pressure on spreads? Two for two.
Yet, the medium term outlook for fixed income hasn’t deviated and remains relatively high, according to sageadvisory.com.
Hearty returns in core fixed come are fueled by factors such as attractive yield carry, a weak growth picture and the wraps put on the Fed cycle
And is the subject of taxes ever far behind?
Prompted by a change in tax laws, last month, investors flocked to park their dollars in fixed income funds, according to ithought.co.in. That said, merit played no role.
In 2023, investors should find out, for example, whether the time is right to put money in fixed income. That would be a yes, the site stated. Equity, gold, real estate or fixed income are the options investors have. For equity in so much as performance is concerned, 2023 will be rough and tumble. On the other hand, participation will score big. The best performing asset of FY22-23’s gold. For investors, rather than dwelling on what went down last year, all eyes should be on taking stock of performance down the line.
In real estate, you might have heard, it’s location…location….and well, yeah.
Now, in financial services, the client calls the shots: their needs, wants. location, where they’re headed and who they can refer on their way there rule, according to usnews.com. Financial advisors have to know their stuff – and more – in the art of generating new clients and engaging those who are already onboard.
One component of an adviser’s role is boosting the knowledge of clients when it comes to gaining a sense of what it takes to meet their goals, according to business owner Vanessa Bester, reported thinkadvisor.com.
How, you might ask? By lending a hand with debt financing or wealth management. Guidance and financial management services like investment management, budgeting and insurance all are in a financial advisor’s wheelhouse.
A financial advisor should pinpoint their niche by homing in on what they do well, their skill set and knowledge. They’ll rise above the competition with a niche. And darn their your expertise might resonate – and loudly -- among prospective clients.
You’re unlikely to see fresh faces among fintech firms.
People person? Bummer, huh?
In any event, according to a major new report, according to a new report Exploring Fintech in 2023 by Erlang Solutions, driven by the tumultuous economic climate, for the year, half of all fintech firms have nipped hiring in the bud, reported yahoo.com.
Among a number of fintech employees, the first half of last year didn’t exactly smack of a Hallmark moment. From mortgage lenders to firms processing digital payments, across 45 companies, more than 4,000 saw their roles go down the drain.
Chomping at the bit to expand and fueled by factors like low interest rates, during the dawn of the pandemic, Fintechs flourished, according to Bloomberg.com. Since then, a plummet in earnings and slumping shares fueled a drop in earnings among firms.
“After several years of sky-high venture funding and more unicorn valuations than you can count on one hand, a lot of fintechs are being forced to mature and streamline more rapidly than they planned to, and job cuts are a quick way to do so,” said Charlotte Principato, financial services analyst at Morning Consult. “This was bound to happen at some point.”
A financial advisor succession plan? It’s a component, of course, of a strategy to pass the baton of a practice to another advisor. Long and short term planning’s typically is part of the plan, according to assetmark.com.
It could be that one component of the plan is the outright sale – internally or externally -- of the business. Or you might add a junior advisor as your successor down the road or pass it to a family member.
Face it: a retirement plan’s a big time consideration for independent financial professionals and, often, comes down to them establishing a succession plan for their business.
A trio of benefits stemming from proactive succession planning include:
Peace of Mind
A succession plan to add to the value of your business and enhance its marketability and:
Provide you an opportunity to prepare next generation advisors
Organizations; yes, they get it. Succession planning’s nothing to poo poo at. That said, when it comes to pulling it off well, it’s a different story, according to delotitte.com.
It takes having the right leaders doing the right jobs at, you’ve got it, the right time, as most organizations recognized years ago. Even so, not many of those very companies have managed to be proactive, not to mention, disciplined, about carrying out succession planning processes that strike gold, the site continued.
By the end of the year, a goal of the Financial Industry Regulatory Authority is to examine 1,000 broker-dealers for Reg bi compliance, according to Bill St. Louis, head of Finra’s National Cause and Financial Crimes Detection Program, reported advisorhub.com.
That’s no small potatoes, considering that the total would account for about a third of the organization’s approximately 3,000 member firms. Compliance flaws in half of its exams were linked to the rule, which is more than two years old, last year.
An update of an annuity sales standard was adopted by Georgia, Illinois and Tennessee, according to thinkadvisor.com. It was developed by the National Association of Insurance Commissioners.
The update was designed by the NAIC to abet the U.S. Securities and Exchange Commission’s Regulation Best Interest sales standard. Its been adopted by a minimum of 33 states.
Failure by enough states to uniformly adopt the update might mean that the SEC could lasso the ability to oversee some aspects – at the minimum -- of sales and fixed annuities, some regulators think.
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Direct indexing? It seems you’re on.
It’s the next large splash in the financial industry, according to comparebrokers.co. And, get this: it’s under consideration as the future. In investing, that is.
Direct indexing’s been around the blocks a few times, of course. It’s been available in this country for, well, decades, according to nucleuswealth/com. Sparked by factors such as affordability and the personalization of portfolios, direct indexing’s popularity’s burgeoned.
Rather than tooling through a motherlode of available ETFs, you can personalize passive investments with direct indexing.
Damien Klassen, Chief Investment Officer at Nucleus Wealth, says: “Direct indexing is the next generation of exchange-traded funds – ETFs 2.0. Direct indexing involves the investor owning the individual shares that make up an index in a separately managed account.
“Because the investor directly owns each of the shares in their own account, they can (customize) their superannuation or investments. “Where an index mutual fund, an index ETF or traditional superannuation fund merely tracks the index, direct investing allows investors to control their investment decisions. Investors can modify their portfolios by creating ‘tilts’, which is the ability to remove or add certain holdings or sectors according to personal preferences.”
Last June, Kiplinger reported, as far as adoption among investors, direct indexing’s had gained the upper hand over both ETFs and mutual funds. Unique benefits that can’t be mirrored in a traditional ETF or mutual fund structure available through direct indexing, and that’s especially so around personalization and tax management.
It’s been, um, shaky times, for Silicon Valley Bank. Perhaps you’ve heard.
Well, Wall Street certainly has. On the heels of the air going out of the balloon of the bank, U.S. Treasury markets have been enduring volatility to the max, reported reuters.com.
The ICE Boa MOVE Index (.MOVE) – a measure of anticipated treasuries volatility – has exploded beyond its high in the face of COVID. Today? It’s around levels experienced, during -- you probably had a hunch -- the financial crisis.
Traders were compelled to reverse their bets on steepling rates in light of expectations the Fed would pause or ease up on increases in interest rates given the lighting fast fall of the bank, coupled with Signature Bank’s.
Earlier in the year, Deloitte issued a banking and capital markets outlook in which, among other things, it laid out the global economy’s remaining fragility entering the year, according to deloitte.com. Uncertainties? You betcha, such as those stemming from a cocktails of factors, including the invasion of Ukraine, a topsy turvy supply chain, barreling inflation and a global tightening of monetary policy.
Banks, over the long run, the outlook continued, should look past product, industry or business model boundaries and seek new sources of value.
As Yogi Berra likely would say: if it wasn’t a challenge, what kind of challenge would it be?
And if he didn’t say it, one too many fastballs must have ricocheted off his glove and against his noggin.
Point is, what with escalating interest rates, an unpredictable economy and relentless inflation starring you in the kisser, it takes work to manage and grow your financial management business, according to forbes.com.
Well, do abet your efforts, to prepare for the first quarter of the new year, 16 members of Forbes Finance Council dispense advice for business leaders.
A few tips:
- Focus on liquidity
- When calculating the cost base, make space for contingencies
- Build up Your forecast by customer
- Consider your insurance model
- When it comes to resiliency planning, pay attention
Business plans, marketing strategies, operational processes and business technology aside, your company’s financial side calls for considerable effort, according to ceoworld.com. Not only that, your company’s longevity and expansion seemingly leans on a solid system of financial management.
You can incorporate quality financial management practices without a hitch in a few ways, including by leveraging the most effective financial software and tools; regularly managing your accounting records and creating seamless billing processes. What’s more, you can establish financial goals that are clear and monitor business performance.
Financial advisors tend to leave their saddles empty
Written by FINSUM
Financial advisors? The bulk of them have the horizon over their shoulder. Nice setting, but you get the drift. Over the next decade, reported advisorperspectves.com last year, about one third of advisors will call it a day. While that’s not exactly raise red flags, what does stand out is that no one’s stepping into their shoes.
The load down: On average, each year, 30,000 people sat for the series 7 examination to become a financial advisor. Now, not is it only closer to 5,000, most applicants are taking it with an eye not on becoming financial advisors, but registered assistants. You read that right.
You don’t need Wikipedia to get the meaning: among clients of advisors who lack a formal succession plan in place, the best clients can do is gird themselves to restart with a new advisor. Problem is, that advisor knows neither them or their goals. Double whammy.
That said, last year, Avantax announced 66 recruits in the fourth quarter, according to thinkadvisor.com.
The company was a regular magnet for the year, attracting 258 recruits, Todd Mackay, president of Avantax Wealth Management, the firm’s independent broker-dealer division, stated.