Wealth Management
According to a report from Charles Schwab registered investor advisor firms with less than $100 million in assets are improving recruiting efforts as of late. In a poll, it was the fourth listed initiative among RIAs in 2021, up five spots from the previous year. How these new recruiting efforts are delegated is also interesting with a quarter of RIA’s planning on adding relationship managers and 15% looking to add a client-facing management role. Additionally, more than half the firms are also adding back office and admin staff. Talent is an increasingly important commodity in the average RIA firm and many new efforts will be made to obtain it.
Finsum: It will be interesting to see exactly how the details of obtaining new talent come out: whether that’s specific programs or bonus-based incentives.
Bitcoin has stumbled as of late, all the way down to $46,000, but Goldman Sachs isn’t backing off their bullishness and they say the price may double to over $100,000 by the end of 2023. The first of the primary reasons is just the groundswell into digital assets generally. The second big factor is how investors will fundamentally see bitcoin moving forward, as a store of value substitute. They see bitcoin eating away at a stalling gold bouillon. To date, bitcoin only makes up a fifth of the ‘store of value’ market, but that could swing all the way up to a market majority. Other cryptos could also jump in to take some of the markets as well.
FINSUM: As Fed uncertainty lingers, investors are going to push themselves more into alternatives to hedge inflation and interest uncertainty and maintain a store of value.
Annuities have been criticized for their lack of a national advertising campaign that could really rally interest, but that will change in 2022. A large number of retirees should give companies enough desire to boost their annuities exposure. In addition to this many of the fundamental changes in regulation such as the secure act are paving the way for annuities to be introduced in new ways. Finally, the stock market has performed better than anyone could expect coming out of the pandemic, and bonds provided now yield and little security. Investors will need to protect their gains and retirement and expect big companies to pitch to these investors more frequently.
FINSUM: Protecting existing stock gains is a great argument for individuals to consider annuities in 2022.
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Most all Americans rely on medicare during their retirement as a means of subsidizing or paying for their healthcare. This year is more critical than ever as changes hit medicare payments because the U.S. is seeing a spike in inflation that eats at retirement funds and might put many in a bind. Medicare costs are split into two main categories: Part A, hospital coverage and Part B, outpatient care. Most don’t pay for a Part A premium and for those that don’t meet the work requirements costs aren’t changing much about $28 for the year, but Part B is a different story. For the lowest income category, the payment is up to $21 a month, and that only increases as tax returns increases. Individuals should appeal their part B premium if their income had a significant change.
FINSUM: These healthcare cost changes are huge, and retirees need to address them in their portfolio given spiking prolonged inflation.
Brokers better look out, the SEC has started the new year with a bang. The Commission has mostly been quiet about its potential Reg BI changes since the rule went into effect about 18 months ago. However, a big new warning has come out from Quinn Emanuel’s SEC enforcement practice. There are “strong indications” of much more robust enforcement coming. According to Kurt Wolfe of the SEC Enforcement Practice, “SEC Chair Gary Gensler is under pressure from broad constituencies to show results in the space. For example, at a recent hearing of the Financial Services Committee of the House of Representatives, Rep. Carolyn Maloney (D-N.Y.) encouraged Chair Gensler to ‘take further action to strengthen this rulemaking,”. Further, “the SEC has signaled that regulated firms may not be getting Reg BI right, and senior SEC officials have made it clear that they intend to take an expansive, perhaps aggressive, approach to Reg BI.”
FINSUM: Since Biden took office it has really only been a matter of time until enforcement scaled up. It is now clear that it is coming.
BlackRock shook up the investment world when he declared global capitalism would make it easier to find a green-way forward. However, it is black rocks model portfolios that really piloted the ESG plane. BlackRock inserted ESG right in the middle of the model portfolios which give many investors easier access to sustainability, and some became ESG investors without even trying to. This vision is what made ESG become the fastest growing investment trend by giving it to clients in a pre-packaged easy to invest format. However, ratings are suggesting some green-washing as 154 of the 155 companies in the S&P 500 don’t actually site emissions reductions as a factor, so BlackRock has crept in on owning lots of fossil-fuel guzzlers like Chevron and Exxon.
FINSUM: Biden admin might want to step up the regulation if it wants to hamstring the greenwashing on Wallstreet.