Wealth Management
Tax, trust, and estate planning are in high demand ahead of a likely reduction to the estate and gift tax exemption in 2026. Surveys of over 2,000 financial professionals revealed that only 13% felt very confident about tax planning strategies, and just one in twenty felt confident with estate planning.
Visual aids can bridge this knowledge gap by making complex concepts more understandable, thus increasing confidence among clients and advisors. Nearly four out of five respondents reported improved confidence in tax planning after webinars that used visual examples.
Using practical examples and visual aids helps financial professionals recall information better and feel more confident discussing these strategies. This increased confidence may lead advisors to proactively bring up and explain complex planning strategies to their clients.
Finsum: Even just breaking the pace of complex information with graphical storytelling can boost client confidence and attention.
BlackRock has created two actively managed ETFs: the BlackRock Long-Term U.S. Equity ETF (BELT) and the BlackRock High Yield ETF (BRHY), focusing on ‘high-conviction’ stocks and below-investment-grade bonds, respectively.
This introduction responds to the growing investor interest in active ETFs, which seek to outperform market benchmarks. Managed by the same professionals who handle similar mutual funds at BlackRock, these ETFs add to the firm's expanding lineup of active products.
Despite their higher fees compared to passive index funds, active ETFs like these are gaining traction among investors willing to pay more for potential market-beating returns. BlackRock's active ETF assets in the U.S. have now reached $25 billion, highlighting a significant trend in the asset management industry.
Finsum: Its critical to consider timing when picking between active and passive ETFs and the potential sources of volatility.
Buffer ETFs have grown rapidly since 2018, now totaling 159 with nearly $38 billion in assets. They attract financial advisors by offering downside protection for the first 10% to 15% of losses while allowing market gains, making them popular during volatile periods like 2022.
Experts point out that these ETFs are easier to rebalance and offer daily liquidity compared to structured notes and annuities. However, buffer ETFs cap potential gains, limiting profits when the market rises, and their performance can be affected by market timing.
They typically have a defined 12-month outcome period, and buying or selling mid-series can negate initial protections and caps. Despite their benefits, buffer ETFs have higher fees and might not pay dividends, making them less suitable for long-term investors compared to direct equity investments.
Finsum: Sometimes it’s worth paying higher fees or sacrificing a little alpha to hedge some volatility
More...
While you’ll find salespeople peddling the pros of annuities littered across the industry and their detractors in equal force, but in reality, index annuities, under specific circumstances, can be a viable option for a steady retirement income. Here are three top providers:
- MassMutual stands out as the top annuity provider with high ratings and a broad range of annuity types, making it a reliable choice for straightforward annuity products.
- Athene, known for its no-charge income and death benefit riders, offers a variety of annuities, including fixed and index-based options, suitable for those seeking guaranteed retirement income.
- Fidelity Investments, partnering with several insurance companies, provides a wide range of annuities and offers the Fidelity Personal Retirement Annuity, notable for its low fees and no surrender charges.
Each of these companies caters to different investor needs, from those desiring straightforward solutions to those looking for comprehensive investment and annuity integration.
Finsum: Index annuities in particular can be a goldilocks solution to income investments during higher volatility.
In wealth management, the portfolio is the product and it’s crucial for achieving clients' long-term goals. Despite the additional services offered, the portfolio's performance is paramount.
One key challenge is adapting portfolio construction to ever-changing market conditions, such as the recent shift to positive bond/stock correlations. Previously, low or negative correlations enhanced diversification benefits, but this advantage has lessened.
As a result, professionals are exploring new ways to diversify, though it's important not to over-rely on these new methods. While increased correlations make reducing volatility more difficult and investors should turn to alts in these types of environments, a measured approach to diversification is essential to maintain long-term returns.
Finsum: Privates and alts are more necessary than ever to hedge the current increased stock-bond correlation.
Financial advisors frequently seek insights into the evolving landscape of advisor transitions and recruitment deals within the wealth management industry. To address this demand, a dedicated annual report analyzes raw data and offers tailored intelligence, unveiling notable surprises that challenge conventional wisdom.
One such revelation was the modest uptick in advisor recruitment despite a thriving equity market, as well as the unexpected success of boutique and regional firms in attracting top talent through balanced approaches and competitive deals.
Even firms perceived as laggards managed to secure notable wins, highlighting the diverse appeal of various business models. The final big finding is that while transition dollars have certainly increased it hasn’t really translated to a substantial increase in movement.
Finsum: Another trend we have noticed is the key piece the tools and tech, that are offered play in advisor recruiting.