(St. Louis)

Stifel is a well-regarded firm in our industry. However, one characteristic of it that doesn’t work for all brokers is that they have an employee model. This runs counter to many of the independents with whom Stifel often gets grouped. Well, that looks like it is about to change as the firm has just hired a leading executive away from Wells FiNet in order to grow Stifel’s independent side, which currently stands at only 90 advisors, or only 4% of their total advisors. The firm is rebranding its independent arm to Stifel Independent Advisors and is looking to recruit new advisors to join.

FINSUM: This seems long overdue in our eyes. Stifel is a great brand and there is untapped interest for advisors to join them as independents.

(Washington)

Brokers, advisors, anyone covered by Reg BI, look out for a crackdown by the SEC. Former chief of FINRA, Susan Schroeder, says that enforcement is likely to start soon (i.e. this year) and may be “very aggressive”. According to Schroeder, “Early enforcement actions will be predicated on things like policies and procedures, but by past SEC standards, that is very aggressive”, and if the enforcement actions “are predicated on things like inadequate training or failures to have policies and procedures, from a legal theory perspective, that’s aggressive”.

FINSUM: So any way you cut it, SEC enforcement of the DOL rule this year looks like it is going to be intense. Brokers beware.

(New York)

The annuities world is generally not what most advisors would describe as “exciting”. Annuities are crucial products which fill a valuable void for millions of clients, but there is nothing in the space akin to a sizzling thematic ETF. However, New York Life recently launched a very interesting product that brings a degree of flexibility to the space that has never been available before. Their new Index Flex offering combines the benefits of variable annuities with those of index and fixed annuities, and very excitingly, allows holders to move between the two. Index Flex is essentially a hybrid product that combines the predictability of an index-linked annuity with the upside potential of a variable annuity. Taken as a whole, this is a combination of benefits that is only available at NYL.

FINSUM: As our advisor readers will know, we cover annuities to a significant extent and this new product launch is pretty rousing to see as the ability to shift between strategies is a highly unusual and beneficial feature for clients.

(Houston)

Commodities are doing very well this year. Every big bank, including Goldman Sachs, thinks we may be starting a new commodities super cycle. The big question is exactly which commodities and who will be the big winners. Everything from food, to metals, to oil has been rising and this creates some clear winners, particularly producers of those commodities. That means a big windfall for countries like Saudi Arabia, Australia, and Chile, who are big net exporters of various raw materials. It is net importers that get hurt the worst, with an absolute behemoth—China—likely to suffer the most, as it is one of the largest buyers of commodities in the world. In fact, it almost single-handed drove the big commodities boom in the 2000s.

FINSUM: So the key here is picking the right emerging markets. Additionally, investors may want to double-think investing in oil, as production hikes could undermine prices quickly.

(New York)

For many years ESG had been a fairly neglected asset class. Advisors and many retail investors thought that investing capital with moral considerations would hurt returns. Over the years many things have changed, including investors learning that ESG screens have actually led to outperformance in many cases and younger generations showing that they care a great deal more about these issues than their parents. Well, those stimuli have led to huge growth in the ESG space, and are leading to big revenue gains for asset managers. Fund providers are able to charge significantly higher fees for ESG-focused ETFs because of their moral importance to clients, and this has led to good fee revenue in an industry that is otherwise seeing contraction.

FINSUM: The key thing to remember here is that ESG funds don’t cost any more to run, so this is highly profitable for asset managers.