Wealth Management
Annuities have been one of the hottest topics since the Secure Act 1.0, allowing them to be a part of retirement plans, and that could be ramping up. The House of Representatives has approved the Secure Act 2.0 with an overwhelming majority of 414-5. Provision 201 would allow the minimum requirements distribution age to be increased from 72 to 75. Another key part of the bill is the automatic enrollment in 401(k)s with a very high contribution percentage. Life insurers are ecstatic about the bill and many believe this will drastically increase the demand and supply of annuities.
Finsum: Most investors underate these small changes to legislation that really open the gates for investments and spur lots of interest.
BlackRock, JPMorgan, Goldman Sachs, Vanguard, Morningstar, and many others are swooping in to purchase direct/custom indexing firms in order to capitalize on this fast-growing market segment. While the most appealing factor is tax advantages ESG-customization is driving faster than ETF growth in the US. The rampant greenwashing problem in ETFs gives custom indexing a leg up by allowing more de-selection of these companies. It also allows a weighting that could be advantageous to different market cycles. Investors could more easily de-select their own companies' stock from an index to reduce exposure.
Finsum: Direct indexing can mirror and even enhance ETFs role while still giving tax advantages!
Goldman Sachs is acquiring NextCapital, a quickly growing fintech company that provides digital advice targeting corporate retirement plans. This is one of Goldman’s five largest asset management acquisitions and will aim to develop relationships with corporate employees. This will also provide a stable source of revenue which plays nicely with its more traditional trading activities. Morgan Stanley and JPMorgan are both ratcheting up acquisitions in fintech that offer better relationships with corporate employees. Next Capital is a little over eight years old and has raised $85 million in its most recent funding round.
Finsum: This could form the foundation of a relationship between many employees in the US and GS providing an avenue for future clients.
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[Webinar] Embrace the Role of Risk Manager with Hedged Equity Solutions
Wednesday, April 27, 2022 at 3 PM ET
On the heels of the first Fed rate hike since 2018 and a slowing post-pandemic economic expansion, many clients are finding the mantra "keep calm" hard to follow. These times of uncertainty are a great opportunity for financial advisors to strengthen existing relationships and win new clients. But how do you get prospects off the sidelines, keep clients invested and manage risk without limiting upside potential?
Magnifi by TIFIN is excited to be joined by Swan Global Investments and Advisor Resource Council for a virtual panel presented by WealthManagement.com. Join our upcoming webinar for a discussion about:
- Risk drivers and opportunities in the current market environment
- Fed policy and the impact on balanced portfolios
- Embracing the role of risk manager as a competitive advantage
- How AI-powered technology is transforming investing
Register at WealthManagement.com
Panelists:
Marc Odo
Marc Odo, CFA®, FRM®, CAIA®, CIPM®, FDP®, CFP® is responsible for helping clients and prospects gain a detailed understanding of Swan’s Defined Risk Strategy, including how it fits into an overall investment strategy. His responsibilities also include producing most of Swan’s thought leadership content.
Prior to joining Swan, Odo was Director of Research for 11 years at Zephyr Associates, a leading provider of investment analysis software. He was responsible for developing next generation risk analytics. Prior to that he was a portfolio manager with Accessor Capital Management, a mutual fund company; and part of the investment analytics team at Pacific Portfolio Consulting, an RIA catering to high net worth individuals and ERISA plans. In both positions, Odo was the resident Zephyr expert. He graduated from the University of Washington in 1996.
Jean Paul Lagarde
Jean Paul founded Advisor Resource Council (ARC) Asset Management in 2015 where he leverages expertise in portfolio construction and options contracts to reshape the risk/reward of equity market exposure. ARC manages equity and fixed income SMA strategies that combine the power of artificial intelligence with the intuition of fundamental analysis in the pursuit of better risk-adjusted returns.
Prior to ARC, Jean Paul served as a senior analyst for an RIA/Hedge Fund, as well as a sell-side analyst and institutional salesperson advising clients on their equity holdings.
Jean Paul holds a bachelor’s degree in economics and a master’s degree in business administration from the University of Dallas.
Matt Barley
Matt Barley, RICP® is Director of Advisor Sales at Magnifi by TIFIN. Prior to joining Magnifi in 2020, Matt spent more than a decade in the financial services industry. He was previously a registered representative and investment advisor at Securities America. Before that, he was an advisory consultant at National Planning Holdings and a wholesaler for Jackson National Life.
Matt holds a bachelor's degree in business administration from University of Colorado Boulder - Leeds School of Business, and is a Retirement Income Certified Professional®.
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The SEC has splashed headlines recently with crypto and ESG rule changes, and they are once again widening their scope. They have proposed a new rule which would force trading firms to register as dealers and fall under oversight. Algorithm and high frequency traders woud now fall under SEC guidelines and scrutiny. Gensler believes these traders provide an important liquidity function for the US financial system and should be overseen by the SEC. The rules would not apply to those that manage less than $50 million. These requirements would put high costs on many financial market participants and might not be justified according to experts.
Finsum: These measures are to prevent a 2020 Fed step in again, but it's difficult to see if this much oversight is warranted given how much it will cost.
Most think of millennials and they compartmentalize them into 3 categories: fee minimizers, crypto /alternative investors, or meme traders. However, a recent poll shows they have a strong desire for traditional income products. Over 82% of more affluent millennials are concerned with finding income products for retirement, which is almost 30 percentage points higher than Gen X. Additionally, almost a quarter of the poll were willing to purchase an annuity in the next quarter, and half of those were millennials. Many of these affluent millennials are looking to income products because they are skeptical that social security will be there for them in retirement.
Finsum: Millennials are bucking conventions and looking early to secure income products like annuities.