Wealth Management
Citizens Financial Group is recruiting wealth advisors from larger firms, prioritizing advisors' character and commitment to client service over their previous affiliations. Thomas Metzger, the firm's senior vice president of private wealth management, has led this effort, bringing in significant teams from JPMorgan.
These recruits include a 12-person team from San Francisco with over $5 billion in assets and a four-person team from Boston with about $1 billion in assets, both previously from First Republic Bank. The collapse of First Republic and Silicon Valley Bank in early 2023 created opportunities for Citizens to expand its wealth management operations rapidly.
Citizens has opened new private wealth offices in major locations and aims to offer comprehensive, integrated services under one roof to minimize frustration points advisors face at larger firms. The bank plans to continue its growth by adding more advisor teams throughout the year.
Finsum: Firms are capitalizing on last years financial turmoil and its might be time to take advantage as well.
Real estate took one of the hardest hits in any submarket due to rising interest rates but as certainty starts to look a little clearer REITs pose to make a comeback. Several real estate investment trusts (REITs) recently received analyst upgrades, indicating substantial potential upside.
Equity Residential, which owns numerous apartment communities, was upgraded by Piper Sandler from Neutral to Overweight with a new price target of $80. Acadia Realty Trust was upgraded by JP Morgan from Underweight to Neutral, with a price target of $18. Finally, Americold Realty Trust Inc., specializing in temperature-controlled storage, saw upgrades from both Barclays and Scotiabank, with price targets set at $26 and $30, respectively. Digital Realty Trust (NYSE
Despite various market conditions, these REITs show promising growth prospects according to recent analyst evaluations.
Finsum: Investors can also look to yield as an important factor and get income exposure through REITs.
Annuities, which base their returns on market interest rates, are currently more attractive due to the highest rates since 2001. Fixed annuities are offering higher guaranteed rates, and fixed index annuities now have higher possible caps for returns.
Variable annuities are less affected by interest rate changes since their returns depend on mutual fund performance. Many annuities offer initial bonuses, which can offset surrender charges if switching from an older annuity with lower rates.
Age also impacts how beneficial high interest rates are, with younger annuity holders potentially locking in higher lifetime income. However, potential future rate cuts add urgency, but it's essential to ensure annuities align with long-term financial goals to avoid penalties.
Finsum: Fixed annuities are in a very favorable position giving a 40 year high in interest rates.
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The demand for technology to support model portfolio management and portfolio construction is on the rise as firms aim to centralize and scale these services to stay competitive. Model portfolios are becoming a game-changer for financial advisors, with significant growth expected over the next decade due to their efficiency in diversification, risk management, and tailored financial planning.
Advisors increasingly rely on asset managers to help manage these portfolios, and Jacobi's technology facilitates this by centralizing performance analytics, integrating investment workflows, and generating professional client reports. T. Rowe Price, an early adopter, has experienced improved efficiency and client engagement through Jacobi's platform.
Model portfolios use technology to enhances team collaboration and meets rising client demands, and they are driving efficiency and expanding market distribution for asset managers.
Finsum: Model portfolios have been one of the biggest technological innovations for financial advisors in the last decade.
Across the pond, Barclays' shares dropped 3.7% on Monday after the bank revealed it would incur an earnings loss due to issuing an excess of structured notes. The bank forecasts a £450 million ($590 million) charge and a nearly 30 basis point reduction in its core tier 1 capital ratio, of which many investors watch.
Consequently, the bank will postpone its £1 billion share buyback announced on February 23rd. Structured notes, which are customized debt products, require stringent regulatory and risk management oversight, and are often used as a specific fixed income solution.
Although Barclays aimed to cap its issuance at $5 billion in 2019, it registered $20.8 billion instead. The bank has not clarified how this error occurred or why it took nearly three years to detect.
Finsum: This over extension reveals the complexity of implementation of structured notes but they still serve a valuable purpose.
ETF costs have fallen precipitously over the last decade but finding growth-oriented options can be a small challenge. Investing $3,000 evenly across these ETFs incurs just $12 in annual fees, making it a cost-effective strategy. All three ETFs have outperformed the S&P 500 and Nasdaq Composite in 2024, suggesting they have more growth potential.
- The Vanguard Russell 1000 Growth ETF (VONG) tracks top growth stocks from the Russell 1000 index, boasting significant exposure to tech giants like Microsoft, Apple, and Nvidia, and offers a low expense ratio of 0.08%.
- The Roundhill Generative AI & Technology ETF (CHAT) targets the burgeoning generative AI market, with holdings including Nvidia, Microsoft, and Alphabet, and has seen a 22% rise year-to-date with an expense ratio of 0.75%.
- The VanEck Semiconductor ETF (SMH) provides broad exposure to the semiconductor industry, including companies like Taiwan Semiconductor and ASML, with a low expense ratio of 0.35%.
Finsum: Technology seems to have sustained the high interest rate below and could be poised to turn around!