Wealth Management

Bonds and stocks weakened following a stronger than expected January CPI report which led traders to reduce bets on the number of rate cuts in 2024. The 10Y Treasury yield climbed 15 basis points, while the 2Y yield was up 19 basis points. 


On a monthly basis, prices were up 0.3% vs expectations of 0.2%. Annually, there was an uptick at 3.1% vs expectations of 2.9%. Food and shelter prices were major contributors with gains of 0.4% and 0.6%, respectively. Along with the recent jobs report, the data undermined the notion that the Fed would be turning dovish later this year. The anticipation of a Fed pivot has been a major catalyst, fueling strength in equities and fixed income over the last couple of months. 


Instead, the status quo of ‘higher for longer’ remains. Some investors are now anticipating that the 10Y yield will rise further. According to Skyler Weinand, chief investment officer at Regan Capital, “Bond yields have not peaked, and we believe that a 10-year Treasury yield with a 5-handle is more likely than a 3-handle in 2024. Persistent inflation, full employment and strong growth may delay the Fed’s rate cuts.”

Finsum: Stocks and bonds declined as the January CPI came in hotter than expected. Fed futures showed traders reduced estimates for the number of rate cuts in 2024.


Any advisor who is serious about acquiring high net-worth clients’ needs a solid marketing strategy. This is because there is intense competition to land these clients, and it’s necessary to differentiate your services in the marketplace.


The first step is to clarify what exactly you are trying to accomplish with your marketing plan. This can include increasing awareness of your practice, building trust with prospects, branding, creating credibility, and highlighting your expertise and knowledge. 


Next, it’s essential to understand the needs, goals, and challenges of your target audience. Some themes that are likely to resonate with wealthy clients are areas like legacy planning, minimizing tax liabilities, or superior levels of service. 


Building authority and credibility is an important prerequisite when it comes to landing wealthy clients. Some ways to do this are through interviews with journalists, being a guest on a podcast or program, collaborating with other professionals, and building a following on social media by regularly sharing valuable information. 


During the process of converting a prospect into a client, advisors should ensure that all interactions with prospects and full of value with the intention to create trust. This starts from the first interaction with a client and should always remain a primary ingredient in every point of engagement.

Finsum: It’s quite competitive and difficult for advisors to land wealthy clients. Here are some tips on how to be successful. 


A recent survey of financial advisors showed that separately managed accounts (SMAs) are seeing more traction in comparison to model portfolios. Only 22% of advisors plan to increase reliance on model portfolios, a 5% drop from the previous year. In contrast, allocations to SMAs are forecast to reach 26% in 2025 from 18% currently. The trend is more pronounced among advisors serving high net-worth clients who see allocations reaching 31% in 2025 from 23% now.


Some of the reasons cited by advisors in the survey for less interest in model portfolios were higher fees, underperformance, a need for customization, and more investment options. The survey is an indication that model portfolio uptake and growth have stalled as only 29% of advisors using model portfolios report increasing use over the past year. 


The survey was conducted by Cogent Syndicated in October and November of last year. The firm surveyed 403 registered financial advisors with an active book of at least $5 million. The report suggests that model portfolio providers are losing ground as many advisors and clients are gravitating towards direct indexing and SMAs due to their customization and tax optimization, while model portfolios fall short in these regards despite offering other advantages for advisors and clients. 



Finsum: A survey of financial advisors showed that model portfolio adoption has stalled. Here are why advisors are gravitating towards SMAs instead.


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