(New York)

A new survey by the Money Management Institute and AON has come up with some interesting findings as it relates to client satisfaction with their advisors. One of the most intriguing findings was that clients say they wished their advisors used more goals-based financial planning. Goals-based planning is the idea that you plan around clients’ individual life goals (e.g. saving enough money to pay for children’s college) and then continually report to clients how they are doing in those areas. Incorporating values into their financial planning is another area where clients say advisors could improve.

FINSUM: Many advisors already do this, but there is likely room for improvement, especially as it relates to reporting. Very few invest and save just for the sake of accumulation without a plan for their money, so reporting on the key areas they are making progress towards is a good step. There are even funds that specialize in helping aid goals-based investing.

(Washington)

Most brokers out there have been relatively happy with the new DOL Rule. No one likes new regulations, but it is reasonably un-disruptive, and miles easier to stomach than the first DOL rule. However, under the surface lurks another problem that the new DOL rule has actually worsened—the push for state-level fiduciary rules. Many states had been pushing for their own fiduciary rules, and some had been standing by to see what the federal rule would look like. With the adoption of a new fiduciary rule for Massachusetts yesterday, it is clear that many states are not satisfied with the new federal rule and will keep designing their own. Thus, the new threat is a patchwork of differing fiduciary regulations across the country.

FINSUM: The idea of a fiduciary rule is kind of like playing whack-a-mole at present. You may “win” in one area, but then it pops back up in another.

(New York)

Banks have been absolutely hammered since COVID erupted, and they have not come back very much at all. Overall they are down 33% on the year versus a 5% gain for the S&P 500. Worries about loan losses and low interest rates headline the set of fears for the banking sector. However, banks may have an ace in the hole. Early in the year they set aside tens of billions for loan losses—which hurt earnings, but that may now be their good fortune. Loan losses have not been as bad as expected and many suspect that banks may start to let some of those loss provisions flow through to the bottom line in the next couple earnings seasons.

FINSUM: In our view, this would be a double whammy to the upside for the sector. Not only would it result in blowout earnings, but it would officially alleviate a big fear—that loan losses are going to be very bad because of COVID. Altogether seems like a good opportunity.

(Chicago)

Earlier this year LPL launch its new Strategic Wealth Services program. It is a special program designed to help advisors with all aspects of setting up their own business, including everything from finding an office to setting up a tech stack to executing payroll. Best of all, LPL promises to do this with “zero out-of-pocket costs for the advisors”. Despite the pandemic, the program seems to be doing well. Once advisors from a Wells Fargo team that recently departed for LPL commented on the program that “LPL’s new affiliation model really appealed to me. It allows me to be an independent advisor but solves for the business operational needs”.

FINSUM: This is a smart program. It appears specifically designed to address the multitude of anxieties advisors feel when moving to an IBD.

(New York)

The market is falling again the day after the Labor Day holiday, and many tech stocks are nearing or in correction territory. It is a rough start to the week, and Goldman Sachs is not offering much hope. The firm published a research piece this weekend which was bullish on stocks overall, but said that another 10% correction may arrive soon. Goldman says that if investors start to doubt the trajectory of the recovery in the face of the super quick snapback in economic output that the market has priced, then stock prices will likely fall.

FINSUM: On the whole Goldman was pretty positive, but they also clearly allowed room for a short-term “shake out” in share prices. This correction we have on our hands might also lead to a change of market leadership, which would be an interesting shift.