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Wealth Management

(New York)

Most of the industry was hoping that states would back off, or at least slow down, their fiduciary rule efforts after the SEC announced it was working alongside them to craft a more comprehensive Best Interest Rule. The idea is that if the SEC could create a rule satisfactory to states, then it would obviate individual state regulations. However, New Jersey is pressing ahead with its own rule. The state formally put forward a new rule yesterday via the Attorney General Burbir Grewal. The rule is comprehensive and advisors would have serious penalties for not abiding. “Conduct falling short of this fiduciary duty would, under the proposed rule, constitute a dishonest and unethical practice,” says an announcement for the state’s Consumer Affairs Division.


FINSUM: We are still hoping the SEC can make a rule that satisfies states, because the last thing consumers or advisors need is fragmentation.

(New York)

A year ago, annuities looked like a product that had outlived its regulatory life cycle. The pending DOL fiduciary rule seemed completely incompatible with the product and its selling practices, so annuities appeared likely to take a big hit. Then the rule got shot down in court, and the whole picture changed. Data is now in on 2018 annuity sales and it looks strong—sales smashed all previous records. In virtually every category of annuities, sales were up considerably, in many case 20% or more.


FINSUM: The annuity sales outlook has completely changed. The next five years—as the number of people 65 or older hits 60 million—looks to be very strong.

(New York)

JP Morgan looks like it is about to push further into wealth management. JP Morgan has always had a solid wealth management practice, but one much smaller than wirehouses or other large broker-dealers. However, the firm has now announced that it is planning to grow headcount in the area by nearly 20%, adding over 1,000 new advisors. According to CEO Jamie Dimon, “We are expanding our footprint to capture more of the opportunity across the U.S. wealth management spectrum — from mass affluent ($500,000 to $3 million) to high-net-worth ($3 million to $10 million) to ultra-high-net-worth ($10 million or greater)”.


FINSUM: Wealth management is a very good business if you can get assets, and it seems like JP Morgan is waking up to the fact that it has a better opportunity in the area than it formerly realized.

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