Wealth Management
(Washington)
A new fiduciary rule has been in the back of all advisors’ minds for several months now. In February…see the full story on our partner Magnifi’s site
(New York)
The model portfolio world has grown highly confusing over the last few years. The explosion in popularity of models has led to thousands on the market, making it very hard to sort one from another. Luckily, Morningstar has launched a new product to help do just that. Morningstar’s new ratings are on a one to five scale (like their mutual fund ratings) and they have increased coverage recently from 76 models to 139. They are also now covering not just SMA models, but theoretical ones. Morningstar gave only 2 out of 1,500 models its top “gold” rating, and one of the pair was Vanguard’s CORE portfolio. According to Morningstar, CORE has “an extremely appealing price tag along with top notch, highly diversified underlying index funds”.
FINSUM: This rating system will be a great resource for advisors, especially as coverage continues to increase. These scores will be useful not just for investment selection, but also for highlighting their utility and legitimacy to clients.
(Washington)
Jennifer Johnston, head of municipal Bond Research at Franklin Templeton, laid the details of what exactly the Biden Administration’s infrastructure plan…see the full story on our partner Magnifi’s site
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(New York)
Congratulations are in order for Merrill Lynch. In what is mundane—but big—news, the firm has just introduced a paperless onboarding solution for clients. Barron’s describes it this way: “fully digitizes the procedure, allowing clients to approve new account openings through digital attestation on a computer, tablet, or cellphone. What once took a week or more can now be done in a day … That may not be its standout feature, though. COBE allows client associates to simultaneously enter information and process multiple new clients in the same household—for multiple accounts … During an online demonstration, Merrill executives showed a fictitious example of a client associate entering information for a couple who wants to open a joint brokerage account, two IRAs, a joint bank checking account, and a custodial account for their niece. Once an associate has entered as much information as he has from an earlier client conversation, he can invite the new clients to collaborate virtually on the rest. They can view the same screen and make changes to it simultaneously. During the process, the associate can click a button to perform a real-time identity check on the client to satisfy know-your-customer requirements, without asking the client to upload documents.”.
FINSUM: This sounds like the holy grail of onboarding tools. Merrill should package this up and sell it as a service to others in the industry!
(New York)
The last year has been rough for annuities rates. The big drop in yields once the pandemic took hold meant annuities providers had to quickly and sharply cut their rates. But at the same time, the need for annuities has never been higher, given volatility and increased rates of retirement as Baby Boomers age. So where can one find the best annuities? Check out Fidelity, Allianz, New York Life, USAA, and MassMutual. For example, Allianz has no annual fees on their fixed index annuities. New York Life offers some very strong variable annuity options, including the ability to withdraw 10% of the account without penalty, and a minimum account value of only $2,500.
FINSUM: More and more advisors are moving into annuities as client need is rising. This has led to innovation in the space (such as no-commission annuities for RIAs) as well as more product creativity.
(Washington)
In its fourth-quarter earnings report…see the full story on our partner Magnifi’s site