(Washington)

If there were ever a sign of things to come from the SEC, this is it. There has been a lot of speculation about how the SEC will approach enforcement of Reg BI under new chief Gary Gensler. It is widely expected that the new administration will be much tougher than under Trump. But even with that expectation, this week’s move is big. The SEC just hired the every-broker-curses-her-name longtime head of investor protection at the Consumer Federation of America Barbara Roper as a senior adviser. Roper has been by far the biggest critic of Reg BI and was the biggest proponent of the Obama era DOL Rule.

FINSUM: The SEC could not have done a better job of signaling where things are heading. Time to buckle down on your compliance and start setting aside working capital to deal with beefed up protocols and more investigations.

Going independent is one of the biggest decisions an advisor will ever make. Moving from being an employee to running your own business is a huge decision. Even simply changing firms once already independent is a major one. There are a thousand considerations beyond just the obvious—branding, client retention, compensation—and advisors need incredible support when making these decisions and even well past the initial integration with a new firm.

Momentum Independent Network focuses on helping advisors with a seamless move. Instead of focusing on “transition”, momentum makes it a smooth evolution, taking a lot of the anxiety out of switching firms. We provide custom tailored support, personalized marketing consultation, business development road-mapping, and full supervision and compliance, among many other included services, such as insurance. Momentum also provides firm-specific platform and technology training so that your team can be up-to-speed in no time.

Your clients will feel how simple the transition is as well, with Momentum offering a seamless and compliant client paperwork process. And because Momentum is affiliated with HilltopSecurities—a leading municipal investment bank and one of the nation’s largest clearing firms*—your clients will benefit from superior execution, market research and insights, and a robust trading platform.

Gain an edge by speaking with Momentum Independent Network today

*As of Aug. 17, 2019. Based on number of broker-dealer clients. Investment News.

(New York)

While most banks try to stay bullish on market, Bank of America just couldn’t help but get gloomy this week, very gloomy. The bank says that record high prices and placid volatility mean a big correction looms. They believe the market is underpricing the risk of a Fed policy change, and when that comes, it will hit like a hammer. They even gave a name to these bouts of volatility/correction: “fragility shocks”. According to the bank, “We believe the US equity market is underpricing the risks of a looming tapering cycle. After all, the equity market has feasted on record monetary support post-COVID, and the Fed's outlook remains impaired by the extreme uncertainty in the macro forecasts on which they base their decisions”.

FINSUM: This unfortunately makes quite good sense. However, the opposing force here is that the buy-the-dip mentality is strong right now, which could provide support in any short-term sell-off.

With so much of the innovation driving our economy coming from venture capital-backed companies, why can’t you find VC in most people’s investment portfolios? It’s because early-stage investing has been the sandbox of institutions and the wealthy. These savvy investors allocate to VC to take advantage of the high-growth prospects of startups. It helps that they have the means to withstand the massive financial commitments and fees, the risks of betting on a small number of companies and the years of illiquidity.

No fair. Ordinary investors could also benefit from enhancing their equity holdings with exposure to companies outside the public realm. What if they could have both the exposure to gross returns of the venture capital universe and the daily liquidity of public stocks? One index solved for that back in 2012. The Thomson Reuters Venture Capital Index (TRVCI) uses private company data to identify the systematic drivers of performance in the VC world and then assembles a portfolio of publicly traded securities that replicate those drivers.

Only one mutual fund, the AXS Thomson Reuters Venture Capital Return Tracker Fund (LDVIX), tracks this index by holding what is in the portfolio. That means retail investors can circumvent the restrictions of traditional VC investments and add well-diversified exposure to the high growth potential of the VC space.

(Washington)

Advisors and their clients have spent the whole summer dreading Biden’s tax plans. Two of Biden’s budgetary linchpins for raising taxes on the wealthy are: nearly doubled capital gains taxes and the elimination of the step-up in basis in inheritance. Until now, they had merely been proposals. However, yesterday the House Democrats passed a budgetary resolution to bring a full vote on the topic. It is expected to pass along party lines.

FINSUM: The Democrats have a very narrow path to getting this passed as part of their $3.5 tn spending package. However, if they can get every Democrat in the Senate to sign, it becomes a reality.