Wells Fargo’s recruiting efforts have been no secret, but it looks like it is starting to pay off. In Q1 of 2022 they brought in over $5.4 billion in assets under management. Wells had seen advisors flee as a result of various public scandals in the last few years. They had lost 1.5% of their advisors in Q4 of 2021 and 8.5% in the whole year prior. The firm has said they are more pleased with their recruiting efforts as of late, but they are still putting forth efforts in the hiring process to retain and recruit advisors.

Finsum: Wells Fargo may be turning a new leaf and the bonuses related to advisor recruiting and retention are bringing in more assets.

The Fed hiked rates at the latest FOMC meeting but they were partially forced to with just about every measure of inflation hitting 30-year highs. However, more importantly they project that the federal funds rate will hit 2.75% by the end of 2023. This may have been the first hike in years but it will be one of eleven if they want to hit that mark. The bond market is pessimistic as they not only are projecting less hikes, but slower growth as well. The yield curve is indicating inflation will be under control but it might be costly. Typically this means that the Fed won’t mean to hike as frequently as they are indicating. There has been a lot of action in the TIPS market and it is indicating they expect inflation to average just shy of 2.8% in the next decade.

Finsum: Markets are most likely right in this scenario and that fewer rate hikes will get inflation under control; hopefully the economy can take the hit.

Private equity set many records for itself in 2021 with gigantic inflows and huge market outperformance, but could that all be slowed in 2022 by an escalating Russia-Ukraine conflict and inflation? Bain & Co said that steeper capital costs driven from these two scenarios will undercut PE as an asset class in 2022. Inflation will hurt growing PE investments and the cheap flow of capital is being reduced by the conflict. There are huge risks that valuations will be much flatter from this point out. This means that the huge inflows and record-setting outperformance might not hold up in 2022.

Finsum: 2021 inflows were already higher than market expectations a natural correction could have been in place, but this could be more severe than just a standard correction.

The U.S. is seeing 30-year records on inflation, and whole generations of American’s have never seen inflation this high. Even worse inflation is even more elevated for healthcare services. Healthcare inflation is expected to be nearly 12% for the next two years according to HealthView Services. This could be a huge hole in retirement savings as a couple of retirees today can expect to spend over $85k on healthcare, those retiring in a decade over $160k and those in the next two decades just shy of $260k. Moreover, social security won’t be enough as the cost of living adjustment doesn’t track healthcare inflation or even standard inflation. Meaning healthcare costs will eat away at most of Social Security.

Finsum: HSAs are more valuable than ever given these ridiculous healthcare inflation costs.

There has been a serious increase in interest in annuities during the pandemic, but overall the product suffered as retirements got put on hold. Bond market disruption has increased that excitement and Legal and General, a British provider, is expecting a big turn around with the pandemic in the rear view. They have already seen a 5% uptick in since the onset of the pandemic. A full recovery is underway and retirement is back on the agenda for many investors, which makes annuities attractive again. Additionally data around savings rates and flows are trending positive for annuities as well.

Finsum: Annuities are just the better alternative for many retirees when the interest rates and inflation are in the position they are now.