InvestmentNews INsider

The INsiderblog

InvestmentNews reporters offer their take on intriguing or controversial articles from around the web.

Apr 3, 2017

How to spot fake answers from Social Security Administration reps

By Mary Beth Franklin

We've all grown a bit weary over politically charged arguments about what constitutes real versus fake news. Based on my overflowing email box, I sense a similar frustration from financial advisers and their clients about how to interpret answers from Social Security Administration representatives that seem to contradict current law."I have had several married clients go to and then leave Social Security Administration offices where representatives consistently tell them 'No, you can't do that' or 'Sorry, the rules have changed' and the like when we know those answers are sometimes just wrong," said Stephen Harnden, a financial planner at Harnden MacLean Wealth Advisors in Peoria, Ariz."Nearly every SSA representative I have spoken with has been friendly, courteous and in a mode of trying to help" Mr. Harden explained in an email. "However, it is very frustrating and time consuming to try to help our clients fight their way through... Read full post

Mar 16, 2017

Confidence: How you can give it to young financial advisers and watch them run with it

By Christina Nelson

Our fourth annual 40 Under 40 project is under way, and we need your help to uncover top young talent in financial advice. InvestmentNews' goal each year is to find the stories that inspire the industry and illuminate its clearest path to future success, which depends on knowing who our next generation of leaders will be and what ideas are emerging from them. In the first three years of this project we garnered well over 3,000 nominations. Great job, readers! Grasping what the future of our profession can be depends in large part on you telling us who amazes you on a daily basis. The editorial team vets these suggestions based on a candidate's accomplishments at such a young age, contribution to the industry, leadership at a firm and in the profession, and promise for continued success. Help us find these enterprising personalities.What's in it for you?Readers have told us time and again that learning about the 40 winners each year has ... Read full post

Jan 5, 2017

The long and short of long-short funds

By John Waggoner

When you board an airplane, the one thing you don't want is a wide range of outcomes. If you're headed to Fort Lauderdale, you'd probably prefer not to land in Vladivostok. A trip that's supposed to end in New York City shouldn't end in Altoona. Similarly, if you're choosing investments for your clients, you probably have reasonable expectations for those investments. In fact, much of the advantage of diversification is not increasing returns, but decreasing unpleasant surprises. Which brings us to long-short funds. These funds can both bet on a security rising in value, or going long. They can also bet that a security will fall in value — going short. It's a hedge-fund technique. In its more mild-mannered form, it's basically a diversified stock mutual fund that has a relatively small short position — a hedge against market declines. While the short position will reduce returns on the way up, it should also reduce losses... Read full post

Dec 21, 2016

Should you go short when the media says go long?

By John Waggoner

Just as most people think they're above-average drivers, many investors like to think of themselves as contrarians — level-headed skeptics fearlessly stand against extraordinary popular delusions and the madness of crowds.One favorite contrarian indicator: Newspaper and magazine covers. It's an indicator that has some merit, but if you sell every time you see the Dow Jones industrial average in the headlines, you might meet the same fate as most contrarians: Flat on the ground and covered with hoof marks from the herd on the Street. Here's how the indicator works: If you see a flurry of markets-related headlines on the front pages of newspapers or, better yet, a bull on the cover of a general audience magazine, it's time to head for the hills. The same holds true for negative headlines or bears on magazine covers. The classic example was a cover of Business Week, which didn't have a bear on its cover, but was titled “The... Read full post

Dec 13, 2016

Will the Fed's steps lead to a stumble?

By John Waggoner

Unless everyone in the universe is wrong — which has been known to happen — the Federal Reserve will nudge up short-term interest rates by a quarter of a percentage point Wednesday. Is it time to worry that rising rates will hurt the stock market?The most famous saying about rising interest rates is by legendary market technician Edson Gould, who formulated the “three steps and a stumble” rule. Basically, the rule says that the stock market tends to fall after the Federal Reserve has raised the fed funds rate three times.The logic behind the rule is fairly simple: The market sees the Fed's first few rate hikes as confirmation that the economy is growing. By the third hike, however, yields from bonds and cash become more competitive with stock returns, and market participants start to suspect that the Fed wants to slow the economy to ward off inflation. The current low level of interest rates throws some doubt on ... Read full post

Dec 6, 2016

Kellyanne Conway gives advisers some lessons from Trump's victory

By Jeff Benjamin

When a last-minute scheduling conflict prevented SkyBridge Capital founder and outspoken Donald Trump-supporter Anthony Scaramucci from meeting a speaking commitment Tuesday morning in Miami, attendees of the MarketCounsel Summit were given an inside look at the historic presidential campaign.Kellyanne Conway, who managed President-elect Trump's campaign, might not be intimately familiar with the financial advice industry, but she still managed to share a few nuggets that could be useful for anybody prone to making assumptions when working with clients or potential clients.On the seemingly blind-sided pundits and pollsters that completely missed the upset of Mr. Trump over Hillary Clinton, Ms. Conway said people were assuming who the electorate was rather than listening to what the electorate wanted.“In this election cycle, the big difference was between what may offend you and what affects you, and the cues were all right in... Read full post

Sep 30, 2016

Attrition fears play into broker-dealers' hesitation to detail new commission schedules under DOL fiduciary rule

By Greg Iacurci

One main theme emerged amid discussion about the Labor Department's fiduciary rule at the Insured Retirement Institute's annual conference this week: Broker-dealers are either still determining the annuity commissions that would likely satisfy the rule's “reasonable compensation” requirements, or they've made that determination but have taken a vow of silence.While it's likely not broker-dealers' primary motivation for keeping mum, fear of adviser attrition plays into their strategy, insurance and brokerage executives said. Let's take a step back for a second to set the stage. The Department of Labor's regulation, released in April, makes a fiduciary of anyone receiving compensation for providing investment advice in retirement accounts such as IRAs and 401(k)s.The rule, which aims to eliminate conflicts of interest, says advisers and financial institutions must only receive reasonable compensation for the recommendation of ... Read full post

Nov 20, 2015

Is Fidelity's plan to ditch relationship with Betterment and build its own robo too little, too late?

By Alessandra Malito

Fidelity Investments' plan to sever its relationship with robo-adviser Betterment Institutional in favor of building an automated investment platform on its own has some observers wondering if the mutual fund giant's strategy is too little, too late.The pair's "strategic alliance" contract will end in December after only a year, as first reported by RIA Biz. Fidelity will continue to work with advisers who choose to use Betterment, and it also will work with other third-party robo vendors, Fidelity spokeswoman Erica Birke said in an email. At the same time, Fidelity will use its resources to create its own digital advice platform. "[M]any of our clients are still looking to learn more about digital advice," Ms. Birke said. "We have been and will continue to deliver the solutions, thought leadership and insights our clients need to feel informed and capitalize on this important trend."DETAILS IN 2016The company will announce more... Read full post

Jun 9, 2015

TD Ameritrade Institutional: Elite LINC 2015: Advisers must brace for volatility

By Frederick P. Gabriel Jr.

It's nice to be one of TD Ameritrade Institutional's "elite" financial advisers.I know because I am hanging out with 168 of them at TDAI's Elite Adviser Summit at the uber swank Grand Del Mar Resort in San Diego, Calif. Not only are they getting treated like adviser royalty, but they get to mix and mingle with one another and TDAI's top brass, including president Tom Nally, and TD Ameritrade chief executive Fred Tomczyk.The three-day gathering brings together financial advisers from 150 firms representing $170 billion in assets under management. My back-of-the-napkin calculations puts that at about $1.13 billion per firm . . . hence the word "elite" in the name of the meeting.Among the firms represented are Beacon Pointe Wealth Advisors, Savant Capital, Abacus Wealth Partners, The Colony Group, Regent Atlantic Capital, Modera Wealth Management and Brookstone Capital Management.... Read full post

May 29, 2015

Advisers: Quit talking to and about each other on social media

By Alessandra Malito

As more advisers flock to Twitter, Facebook and LinkedIn, it's time for them take a closer look at their posts — and focus on whether they're providing what clients and, more importantly, potential clients, really want. Sometimes it seems as though the financial services side of the Twitter universe is filled with technical jargon and comments about what is happening in the industry. But investors are turning to Twitter and other social media sites to find advisers with whom they can discuss important financial decisions. Investors' hunger for these sorts of resources was illustrated in a survey from Brunswick Group, a communications firm, which found 70% of investors believe the digital media will play a role in future investment decisions. So it comes down to the conversation, which is all about sparking relationships. Of the estimated 228,000 advisers who actively use social media, 74% use LinkedIn, 75% use YouTube, 65% use... Read full post

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