(New York)

Allocation funds don’t get a lot of discussion in the press, but they could be a good buy. With their broad mandate to invest in all manner of asset classes, an allocation fund can theoretically be a one-stop shop for advisors or retail investors. However, most of them have not lived up to their hype since broad allocation takes more research horsepower than the funds can afford. However, the T Rowe Price Global Allocation fund has been performing great. The fund invests in 20 different T Rowe funds across all strategies. “This fund represents our best thinking across different asset classes”, says the fund’s manager. It has beaten 92% of its category peers over the past three years.

FINSUM: Allocation funds can be a good choice if you want to merely deposit assets into a single vehicle. However, we would worry about having a great deal of one’s assets with a single manager.

(Washington)

It was already all but over, but now it is really over and done with. States, including Oregon, California, and New York, made a last ditch (and well-worded we might add) bid to step in as defendants in the Fifth Circuit court case regarding the DOL fiduciary rule. The sates want to step in to appeal the rule. Last week was their second attempt to do so, and now the Fifth Circuit Court has turned down their second push, which means the ruling appears final. The denial was made by the same panel of judges as originally vacated the rule, though the denial was unanimous this time.

FINSUM: We think the rule is finally gone for good, but never say never in this story.

(Washington)

So we don’t usually write a story this “editorially” driven, but we wanted to share our view on the new SEC fiduciary rule, and not so much on the rule itself, as the way the SEC is handling it. While we all know the SEC’s new rule came in way less onerous than expected and there are major hurdles to its implementation, we really like the way the SEC is approaching its process. The rule is now open for comment, and listen to SEC chief Clayton’s comments on it, “I am very interested in the comments that come in, whether people think this current proposal fits their current relationships with their clients … I also want to understand, are we doing violence to the investment advisor model in any way? Are we doing violence to the broker-dealer model in any way? People should comment”. Commenting on the broker-dealer model specifically, Clayton said “there are clearly many people for whom that relationship is a more economical model than the investment advisor model”.

FINSUM: Clayton really understands the different considerations for clients and advisors. In our view, these are the most insightful comments we have heard from any wealth management-focused regulator in some time.

(Washington)

The Financial Times has just put out what we think is a very interesting story about the battle going on between President Trump and Amazon. The president has been pushing hard for a regulatory crackdown on Amazon, some say because of Jeff Bezos’ ownership of the Washington Post. But the FT points out that the president needs to tread lightly, as Amazon is a well-liked company and he might not win a popularity campaign against it.

FINSUM: Amazon is apparently the 10th most reputable company in the country. Trump’s approval rating is 43%. Even if Trump is right to try to breakup up some of Amazon’s grip, it seems like a risky campaign.

(New York)

Morgan Stanley is a world leader in wealth management, but its asset management unit has long left something to be desired. It first sold off the arm after the Crisis, but has been building a new one since. The firm currently has $469 bn under management, paltry compared to Goldman Sachs and JP Morgan, both of which has over $1 tn. However, CEO James Gorman says one of his seven year goals is to reach $1 tn. The area is a priority for the firm and according to Gorman “one of the most important growth vehicles we have as a firm right now. I’m very excited about it”.

FINSUM: We imagine there would be a lot of synergistic growth between the wealth and asset management businesses, which would be great for the firm. Additionally, asset management is a capital light business that boosts ROI, which both investors and management love.