Wealth Management
The fixed income (FI) portfolios of institutional investors are evolving rapidly. Investment strategists around the globe are noting that, in the search for yield, many investors are...see more on our partner's site
2001. I was in the middle of the worst bear market in my career. After nearly a decade of enormous growth, the economy was self-correcting. Panic started March of 2000, and there didn't appear to be any let up with selling....see the full story on our partner's site
Democrats are desperately looking for ways to pay for their pending spending packages and they just found a new way, taxes on unrealized capital gains. The new tax was introduced by Senator Ron Wyden on the finance committee and will only be applicable to those with over $1 billion in assets or $100 million in annual income. Dems say it's necessary to allow billionaires to just continually avoid paying taxes and accumulate capital while also raising funds. Those opposed see a slew of problems in collection and lots of ways to avoid the tax. Only about 700 Americans would necessarily qualify for the tax.
FINSUM: This is a lot of money, but the amount of oversight funds just to track down billionaires assets will be a major boon to the bottom line for the government.
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Annuities are often disregarded for mental reasons. Frankly, many investors can’t stomach shelling out a large sum of money for a benefit far down the line, and that all bears out in the data, as deferred income annuities make up only 0.7% of annuity sales in 2020. But longevity annuities should be a consideration for many Americans in their portfolio, particularly for those who worry their finances won’t last. The CDC says Americans are living over 6 years older than in 1950 and that's a lot of accumulated income needed to be made up for. Longevity annuities come with a variety of benefits that integrate with your tax and 401(k) schedule.
FINSUM: The mental barriers of annuities are high but modern solutions like refund options and beneficiaries exist that can ease the traditional concerns of annuities.
Outsourced chief investment officers got a huge boost from the pandemic, and that trend may be here to stay. According to a study by Cerulli Associates OCIO will grow at a rate of 5% annual for the next 5 years. In the year after the pandemic started the AlphaNasdaq OCIO index grew by 30.69%. OCIO's multi-asset class strategy combines everything from traditional stocks and bonds to sectors like real estate, and this multi asset strategy improves efficiency and tailor risk tolerances. In house investment teams have a harder time competing against OCIO’s in a low rate environment as they can’t seem to identify the returns and lack the connection OCIO’s have.
FINSUM: Specialty skill sets are the predominant employment trend in the 21st century and OCIO brings an expertise that will solidify their part of the financial industry in the years to come.
The DOL took a very important and surprising step today. Many advisors and the industry more generally has been calling for the DOL to delay their implementation of the Fiduciary Rule, and somewhat amazingly, that is exactly what the agency just did. Referring specifically to the rule that was passed in the final few weeks of the Trump administration, the DOL is delaying implementation until the end of January 2022. Further, it will not enforce several parts of the rule, including the rollover aspect, until June 2022.
FINSUM: So the month extension isn’t that big, but will give some firms more time to get their matters in order. The bigger question is when the new Biden era DOL rule be implemented.