This summer brings a chance to refresh your wine experience by exploring local wines, visiting new wineries, and shaking up your routine to discover fresh and exciting vintages. Engage with local wine merchants and delve into the wines of different regions or varieties. 

Supporting local wine regions and occasionally splurging on a special bottle can elevate your wine journey. When traveling, seek out regional wines and visit local wineries to expand your palate. Encourage restaurants to feature local wines by asking about them, helping to boost their visibility. 

Embrace the adventure of trying something new, guided by recommendations from wine experts. This year, keep an eye out for trends like wines from minority and female winemakers, sustainable packaging, and alternative wine options.

Finsum: I think the combination of pairing a winery you know and one that is new for a tasting day allows a more intricate tasting experience.

ETFs have been on an ultra-high growth trajectory for over a decade now but at least part of that is being fueled by model portfolios. According to a Cerulli Associates report, ETFs are becoming a fundamental part of models. Asset managers and third-party strategist model providers now allocate about 54% to ETFs. 

Despite only 12% of financial adviser assets being held in practices primarily using model portfolios, Cerulli estimates that 24% are "model portfolio targets," reflecting client-specific customizations. BlackRock leads as the largest model provider with $84.3 billion in model assets, followed by Capital Group with $75.4 billion.

ETFs have surpassed mutual fund assets within models, and the trend is expected to continue as more products reach their three- and five-year track records, according to Matt Apkarian of Cerulli. The report also highlights the trend towards customization within models, combining ETFs with separately managed accounts to meet individual client needs.

Finsum: Technology augments the current financial offerings to ultimately drive innovation. 

The SEC has introduced new disclosure requirements and registration processes for registered index-linked annuities (RILAs) and registered market value adjustment (MVA) annuities in hopes of bringing clarity to the industry. The final rule mandates issuers of non-variable annuities to use Form N-4, updating the framework for these products. 

This change aims to help investors make informed decisions, as the market for these products has grown significantly, with RILA sales reaching $47.4 billion in 2023. The amendments include a summary prospectus framework and extend Rule 156 to non-variable annuity advertisements to prevent misleading materials. 

While SEC Commissioner Hester Peirce supports the general approach, she expressed concerns about potential biases and the need for creative disclosure techniques to enhance investor understanding. The amendments will take effect 60 days after publication in the Federal Register, with full compliance required by May 1, 2026.

Finsum: Annuities seem bogged down by more complexity, and this ruling could help the industry in the long run. 

Bias is a huge problem for high-net-worth individuals (HNWIs), with nearly two-thirds   acknowledging that biases influence their investment decisions and 79% seeking relationship managers (RMs) to help mitigate these biases, the need for wealth managers to modernize their profiling tools is more pressing than ever.

 AI-powered behavioral finance offers a sophisticated solution, providing RMs with deep insights necessary for crafting hyper-personalized financial plans, portfolios, and client experiences. 

Traditional demographic profiling methods are inadequate, often leading to incomplete client profiles and unsatisfactory experiences, as evidenced by the same percentage of HNWIs concerned about personalization. Embracing this technology can transform how wealth managers engage with clients, offering tailored advice and capturing a larger share of the HNWI market.

Finsum: Technology is really allowing advisors more flexibility than ever which can help tailor strategies for HNW clients. 

Strategic inflection points often build up gradually before causing sudden change, reflecting the need for constant innovation and adaptation in business. Embracing technology, such as direct indexing can create efficiencies, scale operations, and enhance investment processes which is crucial for asset managers. 

Understanding and meeting complex client demands, especially in retail, is essential as clients seek value, not just investment vehicles. The rise of ETFs and SMAs shows the importance of offering cost-effective, customizable solutions, while active management must justify its value in a fee-compressed environment. 

Indexing and alternatives have gained traction due to their reliable and affordable returns, but asset managers must continue to adapt and price their offerings appropriately. Ultimately, leveraging technology and maintaining a client-centric focus are key to navigating disruption and ensuring long-term success.

Finsum: Direct indexing should really be thought of as alpha that is on the table ready to deliver to clients that can afford the sizeable investment.