The rise of fee-based annuities is accelerating as insurance firms respond to evolving regulations, especially in light of the Department of Labor’s fiduciary rule. These products, which charge transparent annual fees instead of embedded commissions, are designed to better align with client interests and reduce potential conflicts.
However, while fee-based annuities may suit some investors, others—particularly long-term holders—might benefit more from commission-based options due to lower lifetime costs.
Commissionable annuities, despite carrying higher built-in expenses, can eliminate ongoing advisory fees and may be better suited for clients who need less active management. Choosing between the two depends on several factors, including the annuity's fee structure, potential need for liquidity, and whether features like living benefits are added.
Finsum: Ultimately, advisors and clients must carefully weigh these trade-offs to determine the best fit based on individual goals, timelines, and financial preferences.
Once seen as a slow-moving defensive play, the utilities sector has surged in 2024, outperforming all other S&P 500 sectors thanks to its unexpected ties to artificial intelligence. With companies like Constellation Energy and Vistra powering AI data centers through nuclear energy, utilities are benefiting from tech-fueled demand growth typically reserved for Silicon Valley.
This shift has pushed the sector up nearly 26% year-to-date and attracted strong inflows, even outperforming on both market-cap and equal-weighted bases. Traditionally valued for their consistent demand, pricing power, and dividends, utility stocks are now getting a second look from growth-focused investors.
Actively managed funds like the Virtus Reaves Utilities ETF (UTES) have capitalized on this shift, delivering over 40% returns by overweighting AI-aligned holdings. Meanwhile, traditional utility ETFs such as XLU, VPU, and IDU remain popular options.
Finsum: AI could continue to reshape what investors expect from the utility sector.
Francois Rochon once observed that true investing success comes not from avoiding market volatility but from using it to one’s advantage—a mindset that resonates deeply today.
Markets, by nature, swing between extremes, and the recent months have been no exception, testing the patience of even seasoned investors. Rather than reacting emotionally to these shifts, investors are increasingly turning to structured approaches that bring consistency to decision-making.
One such approach is factor-based investing, which allocates capital based on specific attributes like profitability, low volatility, or long-term momentum. This strategy reduces reliance on market timing and instead builds portfolios grounded in time-tested characteristics.
Finsum: In uncertain environments, such disciplined frameworks can offer clarity and help investors stay focused on enduring outcomes rather than short-term noise.
Plan sponsors continue to grapple with low engagement and limited financial literacy when it comes to retirement income within defined contribution plans, according to a new DCIIA study. Many employers are hesitant to implement retirement income solutions due to competing priorities, legal risks, and a lack of internal resources or formal decumulation strategies.
Complexity, lack of standardization, and concerns over liquidity and portability further complicate adoption. However, plan sponsors anticipate growing interest in lifetime income options through 2025 and 2026, especially as peer adoption increases.
Safe harbor provisions from SECURE 2.0 are expected to encourage adoption by reducing perceived legal liability, and DCIIA will expand its research later this year to better understand these barriers and opportunities.
Finsum: Solutions that offer personalization, flexibility, and simplicity are most appealing, though widespread uptake may hinge on stronger education and clearer evaluation tools.
Although it's common to think small-cap stocks suffer most during recessions, the data tells a more nuanced story. Analysis of developed markets shows that in 64% of years when GDP declined, small caps actually outperformed large caps—a rate even higher than their typical performance advantage.
This finding challenges the belief that economic slowdowns always disadvantage smaller firms. One reason may be that financial markets are inherently forward-looking, often pricing in future recovery well before it's visible in economic data.
As a result, the size premium—where small caps outperform—can still emerge during downturns. Ultimately, small-cap strength isn't strictly tied to GDP trends, underscoring the importance of long-term diversification over short-term predictions.
Finsum: This is much different than the interest rate driven volatility several years ago, this could be a great time to capitalize
Raymond James is addressing a quieter challenge in the wealth management sector: helping independent advisors scale their teams amid growing client demands. This week, the firm introduced Talent Sourcing, a new in-house recruitment service that offers personalized hiring support, including candidate outreach and screening tailored to each advisory team's needs.
The service aims to bridge the talent gap across roles ranging from junior advisors to specialized support staff, allowing advisors to focus on growth without sacrificing service quality. It arrives as competition for top advisory talent intensifies, especially following LPL's $2.7 billion acquisition of Commonwealth Financial.
By providing a vetted shortlist of candidates, Talent Sourcing complements Raymond James’s broader suite of advisor tools, including its Paraplanning Services launched last year.
Finsum: Ultimately, this initiative not only strengthens internal practices but also positions the firm to meet evolving client expectations for more comprehensive, value-added financial services.
Dodge & Cox Emerging Markets Stock earned a Medalist Rating upgrade to Silver from Morningstar, thanks to increased confidence in its disciplined mix of qualitative judgment and quantitative screening, particularly valuable in navigating under-researched segments of emerging markets.
This hybrid approach, while unusual for the firm, uses a valuation-weighted model to flag potential opportunities, especially among smaller-cap names, before handing decisions over to the fundamental research team. Since its 2021 inception, the fund has delivered solid performance, outperforming a majority of its peers and its benchmark. Its portfolio, broader than other Dodge & Cox offerings, includes over 200 holdings with considerable overlap in top names with the firm's international strategy.
The JPMorgan US Research Enhanced Equity fund also saw a Morningstar upgrade, thanks to a highly stable and experienced 19-person analyst team that has consistently driven strong stock selection within a benchmark-aware framework.
Finsum: Now, could be a good opportunity to capitalize on certain EM as trade disrupts markets.
Structured notes can offer attractive returns, but they come with notable risks that investors should carefully consider. One of the primary concerns is liquidity risk, as these products often lack a secondary market, making it difficult to sell before maturity without potentially accepting a steep discount.
Market risk is also a factor, since structured notes are tied to the performance of underlying assets that may be volatile, especially when linked to speculative markets. Even if a note includes downside protection, extreme fluctuations can still lead to losses.
Default risk is another major issue, as the investor’s return ultimately depends on the solvency of the issuing institution. In the event of a bankruptcy—such as Lehman Brothers’ collapse—investors may lose their entire principal regardless of market performance.
Finsum: However, when structured thoughtfully, these notes can offer enhanced yields, downside buffers, or tailored exposure to specific markets not easily accessed through traditional investments.
In March, U.S. equity markets retreated sharply, driven by renewed tariff tensions and mounting economic uncertainty, marking their steepest monthly losses since 2022. International stocks, however, maintained their relative strength and continued to outperform the S&P 500 on a year-to-date basis.
This environment reinforces the importance of active management in fixed income model portfolios, where careful duration and credit positioning can help mitigate downside risks while still capturing income opportunities.
Dividend-focused equities stood out as a resilient segment, benefiting from their tilt toward defensive sectors amid market volatility. Fixed income returns were subdued overall, with longer-duration bonds and lower-quality credit coming under pressure from rising stagflation concerns. Income portfolios remain positioned defensively, emphasizing quality income sources across asset classes to navigate a more uncertain economic landscape.
Finsum: Investors are favoring income-generating assets with stable cash flows as risk sentiment declined.
Apex Fintech Solutions has introduced a new Direct Indexing platform designed to help advisors and fintechs create tailored, tax-smart portfolios for their clients. The solution enables investors to directly hold the individual stocks within an index, allowing for fine-tuned adjustments based on personal goals or values like ESG preferences.
With a minimum investment of $10,000, it opens access to advanced portfolio customization for a broader range of users. The platform offers built-in benchmarks for large, mid, and small-cap equities, and incorporates automated tax-loss harvesting to improve efficiency and returns.
Seamlessly integrated into Apex’s Augmented Advice™ suite, it simplifies portfolio management while supporting deep personalization. Future upgrades will further enhance customization, including user-defined indices and more precise portfolio adjustments.
Finsum: ESG is a great spot for custom indexing because it is ripe for picking companies that align with investor value.