Eq: Financials (114)
ESGs? So called Active driven agendas? Two peas in a pod? Um, yep; that is, if you ask Indiana Attorney General Todd Rokita, according to foxnews.com.
Rokita contended that state law places a roadblock in the ability of ESG to impact investments by state government employee pension funds. He furthermore states that BlackRock, one of the world’s largest investment funds, potentially has “run afoul: of state and federal antitrust laws. How? By leveraging ESG in its investments decisions. The company also promotes its "firm-wide commitment to integrate ESG."
He argued that the Indiana Public Retirement System is required to invest the pensions of citizens "with care, skill, prudence and diligence," in an advisory opinion late last month. He also went on to allege that since ESG investments stem from political instead of financial interests, it’s a legal no no for the INPRS to make investments with ESG guidelines in mind.
Looking ahead to future ESSH campaigns, boards would be savvy to expect a settlement – or for activists to prevail – and not withdraw or a failed activist initiative, based on research from diligent.com.
While there was a drop off in the volume of activism activity between 2020 and last year, 13% of the campaigns last year struck gold. In 2020, it stood at 11%. It was indicative of a shift in corporate commitments to ESG, the site continued.
You know what they say about timing? Well, plenty, probably, but among them is now an idyllic time – the best in years, in fact -- for financial advisors to bolt one firm for another, according to Mindy Diamond, founder and CEO of Diamond Consultants, according to diamond-consultants.com. It originally appeared on thinkadvisor.com.
So, why now, you might ask? Diamond says quality advisors are receiving transition packages “at real high water marks.” She added that it’s a “real sellers market” where advisors are “more likely [to] find [their] version of utopia versus five or 10 years ago.”
Okay, that can be persuasive.
Now, compensation aside, financial advisors with an eye making a change also are keen on “freedom and control,” said Diamond. Autonomy, she continued, in squarely in their wheelhouse.”
And there’s more, she noted. A burgeoning number of options are on the plate for advisors eyeing parting ways with large firms. Among them: aligning with “boutiques” that offer freedom and control, more opportunities for those with entrepreneurism on their radar to start RIAs of their own
That said, tempted though you might be, before delver deeper into a potential job switch, consider a few things, advises vantageinpact.com.
- Thoroughly Review the Expense Structure Details
- Upfront Bonus (Loan) - Proceed with Caution!
- Develop a Comprehensive Proforma to Compare and Contrast Firms
The idea of customization rocks your financial world, does it?
Well, then, direct indexing just might speak to you.
You might that to kick things off, most direct indexing could be labelled as somewhat boiler plate, yielding access to a handful of core indexes like the S&P 500 or Schwab 1000, according to yahoo.com. Then comes the customization, with the opportunity to personalize the portfolio. How? By pruning out certain companies it contains.
The catalyst behind such decisions could be, oh, say, personal values and beliefs like leaving out fossil fuel producers gun manufacturers and alcohol, the site continued.
The degree of transparency into each holding available through direct indexing can generate additional chances to personalize investments.
Investors can scoop up the stocks of an index instead of a mutual find or exchange-traded fund through direct indexing, according to cnbc.com.
While direct indexing was once the exclusive domain of those boasting mega dollars, the mainstream’s been getting on board as well. The likes of Vanguard, BlackRock and Morgan Stanley are providing offerings to abet the ability of individuals to personalize their positions based on factors like risk tolerance.
47% of investors concur: ESG investments would have role on environmental, social, and corporate governance on a macroeconomic level
Written by FINSUM
As geopolitical factors lead to a reevaluation of a number of beliefs in the spectrum, currently -- like the first half of the year – the terrain continues to be rife with environmental, social and governance (ESG) matters, according to corpgov.law.harvared.edu.
While some forecasts laid out by the group in its February post “ESG: 2021 Trends and Expectations for 2022,” were on the dime, other were stymied by unexpected circumstances. They included, for instance, the reverberations from the Ukraine invasion, a spike in regulatory scrutiny and some blowback from U.S. Supreme Court rulings.
During the first six months of the year, the Russian intrusion of Ukraine took a hefty toll on ESG trends and performance, according to the site. The fire was lit under oil and gas prices, while the performance of ESY-focused funds lagged.
Then there’s the bigger picture, in which 47% of advisors concur that ESG investments in DC plans would play a role on environmental, social, and corporate governance on a macroeconomic level, according to loma.org. Occasional advisors? Well, they’re more likely to expect ESGs in DC plans to impact conditions more widely.
With apparent eroding client interest, ESGs might be losing some of their bang, according to thinkadvisor.com. In the past several months, 31% of advisors reported taking questions about ESG or socially responsible investing from clients. That’s down from 39% who indicated as much last year and in 2020.
Thirty four percent of advisors were found to tap or recommend these strategies to clients this year, according to the survey. While that’s an uptick of 2 percentage points from 2021, it receded from a high of 38% in 2020.
Investmentnews.com reported in June that, in recent years, while a burgeoning percentage of financial advisors folded ESG investments options into their business, more now indicated they intend shore back on suggesting such investments, according to a survey.
While financial advisor use or recommendation of environmental, social and governance or ESG investing strategies have moved consistently along over the past four years, according to prnewswire.com. However, during the next 12 months, it could slip in use, according to the 2022 Trends in Investing Survey, conducted by the Journal of Financial Planning and the Financial Planning Association, as provided to prnewswire.com by the Financial Planning Association.
With apparent eroding client interest, ESGs might be losing some of their bang, according to thinkadvisor.com. In the past several months, 31% of advisors reported taking questions about ESG or socially responsible investing from clients. That’s down from 39% who indicated as much last year and in 2020.
Thirty four percent of advisors were found to tap or recommend these strategies to clients this year, according to the survey. While that’s an uptick of 2 percentage points from 2021, it receded from a high of 38% in 2020.
Investmentnews.com reported in June that, in recent years, while a burgeoning percentage of financial advisors folded ESG investments options into their business, more now indicated they intend shore back on suggesting such investments, according to a survey.
While financial advisor use or recommendation of environmental, social and governance or ESG investing strategies have moved consistently along over the past four years, according to prnewswire.com. However, during the next 12 months, it could slip in use, according to the 2022 Trends in Investing Survey, conducted by the Journal of Financial Planning and the Financial Planning Association, as provided to prnewswire.com by the Financial Planning Association.
HSA’s crossed the $100 billion mark in January and Americans are heavily investing in these triple tax break accounts. There was also a spike in the total number of HSAs in 2021 as an annual increase of 8% opened accounts, and assets are also flowing in up almost 20% from the prior year. Investors use HSAs in combination with high deductible plans and were legally formed in 2003. The biggest reason for the spike in HSA growth is the tax advantages where there are no taxes on contributions, growth, and withdrawals if used on medical expenses. Investors can also pay out of pocket for expenses and reimburse themselves afterward, but almost 93% of HSAs aren’t invested in mutual funds or investments
Finsum: Investors should take advantage of the capabilities of mutual funds or ETFs in their HSA to maximize their ability.
Some major industry lawyers think the DOL is poised to issue the newest fiduciary rule in short order. Bradford P. Campbell, partner at Faegre Drinker Biddle & Reath says that the new rule will be coming this Spring. The new rule is a long-time coming if you consider that they began working on it when Biden took office well over a year ago. According to Campbell, that makes sense, "That's because the issues are hard. To their credit, they're spending a lot of time meeting with people and discussing the issues. I think DOL is just taking time to do the rule as best they can". According to Fred Reish, another partner at the firm, "I've heard from people that they're actually working very hard on it right now ... So it's not like it's been set aside on the top of a desk until somebody gets confirmed".
FINSUM: This would be a big move by the DOL and is likely to catch advisors unaware as with all the volatility this year, this has not been high on the overall wealth management radar.
The latest data from MSCI Inc. regarding the environmental social and governance criteria gave updates to America’s largest Financial companies like Wells Fargo, Citigroup, and Morgan Stanley. However, some are accusing rating agencies of ‘greenwashing’ the criteria because these same companies lent a combined $74 billion to fossil-fuel companies. This is the exact reason the SEC is looking to step into ESG ratings in one of their latest announcements. In fact, only 3 lenders in the S&P 500 received ESG rating downgrades. This is mostly because MSCI only considers the fraction of loans to polluters, not their total value.
FINSUM: Total existing outward loans might just be a way the SEC could come down on future ESG rating regulation if these stories gather more headlines.
Goldman Sachs has a new platform for investors to assist in portfolio management. In a partnership with Amazon’s cloud division, GS is bringing data and software tools for software management to a cloud computing environment. The product will give investors access to aggregated data and GS expertise in investing. Additionally they hope to lower the barrier to entry for quantitative trading techniques and allow smaller firms to have access. The partnership came as a shock at how close both companies are to one another. This also adds another company to Amazon's growing list of cloud based partnerships which have had an incredibly high success rate. GS will monetize the platform and target it to hedge funds and other financial companies.
FINSUM: This products biggest benefit will be the clean data and accessibility, but a strong partnership like this could send regulation warning signs to Washington.
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(New York)
For the most part, regulatory risk is understood well before it becomes a reality. There is a lot of uncertainty around the final rule, but generally you can prepare long in advance. That said, Reg BI may be about to cause a big problem in publicly traded markets. In particular, there is increasing speculation that Reg BI may soon be applied to everyone’s favorite darling (or the opposite), Robinhood (HOOD). The company has been under intense scrutiny for most of this year for its monetization strategies as well as its gamification of trading.
FINSUM: And this would not just be limited to Robinhood but all online trading platforms. This could lead to some significant volatility.
(New York)
The whole market—including advisors—has pretty much been panicking lately about to invest in what could be a period of high inflation. The duress is understandable considering we haven’t had significant inflation in decades. However, those trying to diversify into assets which are likely to thrive during inflation should look no further than the SPDR S&P Regional Banking ETF (KRE). The normally sleepy sector is surging this year, up 37% versus the S&P 500’s 11%. The reason why is simple: higher rates mean better earnings for banks, which earn the majority of the revenue from interest income.
FINSUM: If you think inflation is going to stay elevated, this is a great hedge. However, if it falls, it is easy to imagine regional banks tumbling in value.
(New York)
Eyes and ears have been on the Fed as the bond market still is unsure of the future of Inflation, but it was…see the full story on our partner Magnifi’s site
(Silicon Valley)
Fintech Company Upstart experienced a rally reminiscent of the Reddit-fueled GameStop frenzy weeks back as its stock jumped…read the full story on our partner Magnifi’s site