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InvestmentNews reporters telling it like it is, offering up their take on intriguing or controversial articles from around the world wide web.

Feb 11, 2014

'Fear of missing out' drives T3 agenda as tech news comes fast and furious

By Joyce Hanson

Monday — Day One of the T3 Technology Tools for Today conference, and instead of scurrying back to my room to write this blog post, I'm sitting in the middle of the swirl here at the Hilton Anaheim because I don't want to miss anything. For the three days that T3 is in swing, I have a feeling I'll be suffering a serious case of FOMO — fear of missing out — as the tech news comes fast and furious and I scramble to be everywhere at once.Case in point: about half an hour ago, I snuck in to catch up on a conversation between Jason Borgmann, vice president of adviser-facing technology at LPL Financial, and Dryden Pence, chief investment officer of Pence Wealth Management. Their session title was pretty irresistible: “Adopting Complex Trading and Re-balancing: The Best and Most Terrifying Thing I Did in 2013.”Laptop and smartphone firing on all cylinders, I was all set to take notes on how Mr. Pence finally took ... Read full post

Jan 27, 2014

Advisers weigh in on income disparity

By Christina Nelson

Having read many of the articles and watched the TV segments examining income disparity/inequality in the United States, and in anticipation of President Obama's State of the Union address and the Republican response on Tuesday, our editorial team has been discussing for weeks what angle of this story is left to tell, particularly to our audience of financial advisers.Like many of our readers, my background in finance, economics and even history is stirring up an interest to better understand what is really happening here. When I read that wages have been stagnant over the past few decades while corporate profits have soared, and that this gap continues to broaden, I wondered what the upshot is for economic growth. Because all people, institutions and governments at every wealth level interact as players under the same umbrella economy, shifts in balance are felt by anyone in one way or another, not just the poor and not just the rich.... Read full post

3:33 pm EST

Inside Pimco's power shift

In the wake of Mohammed El-Erian's departure from Pimco, InvestmentNews editor Fred Gabriel sat down with senior columnist Jeff Benjamin to discuss what this shift of power may mean.Is the bond giant well-positioned in the current market cycle, and how can they stand out if fixed income doesn't?By use of this code snippet, I agree to the Brightcove Publisher T and C found at --> This script tag will cause the Brightcove Players defined above it to be created as soonas the line is read by the browser. If you wish to have the player instantiated only afterthe rest of the HTML is processed and the page load is complete, remove the line.-->brightcove.createExperiences();... Read full post

Jan 20, 2014

How to outperform using boring old index funds

By Jason Kephart

One of the most common knocks against index funds is that they guarantee you average returns minus fees and, by golly, clients need above average returns or else they're going to start looking for a new adviser.But it's silly to think that the only way an adviser can add alpha to a client's portfolio is by finding the next hot fund manager, sector or stock. In fact, for advisers, adding alpha is as simple as making savvy tax moves and as stopping clients from making classic investing mistakes like buying high, selling low and thinking short-term instead of long-term. These are all basic things that mom-and-pop investors probably aren't thinking about on their own. And these are things that an adviser can actually control, unlike, say, the market's returns. So even by using index funds, which are designed to give investors the market's return, minus fees, an adviser can add performance to a client's portfolio that they likely wouldn't... Read full post

Jan 17, 2014

What's next for Nicholas Schorsch and RCS Capital?

In the wake of back-to-back acquisitions of Cetera Financial Group and J.P. Turner, InvestmentNews Editor Fred Gabriel sat down with Senior Columnist Bruce Kelly to discuss the latest news and to find out what might be next. In an interview with InvestmentNews on Thursday, Mr. Schorsch likened his burgeoning network to the old Merrill Lynch & Co. Inc. or Raymond James Financial Inc. Is that possible?... Read full post

Jan 17, 2014

Breaking up is hard to do – especially in business

By Liz Skinner

It turns out advisory partnerships aren't that different from marriages, and with both, breaking up is no easy task. Professionals who help pairs of advisers decide whether to separate say the aftereffects deserve serious consideration, particularly because clients also will feel the heat.“When breaking up a team that has worked together for years, it's going to have a massive impact on everyone involved,” said consultant Karl Gretz, president of Gretz Consulting Group. (Do you have a story about a failed adviser partnership? e-mail Liz Skinner.)Most formal partnership agreements will define in advance how the assets, clients and team members are to be split under different circumstances, including how a partner's half of the business will be monetized if one side walks away. But there are emotional impacts of a division that advisers may not recognize they'll face. The entire team, including the partners, should pursue... Read full post

Jan 15, 2014

How to scale your advisory practice effectively

By Liz Skinner

Advisers looking to grow their businesses should carefully plot the expansion of their practice. They should expect to suffer a little, too.Business leaders who have succeeded in scaling their companies — growing, say, from two people on staff to 200 — did so with a focus on spreading their convictions, not their geographic reach, two professors at the Stanford Graduate School of Business say in a book due out next month.In “Scaling up Excellence: Getting to More Without Settling for Less” (Crown Business, 2014), Hayagreeva Rao and Robert Sutton stress the importance of guiding growth and first eliminating “the bad” to ensure it doesn't grow along with the positive elements. “To spread excellence, you have to clear out the bad stuff first because bad is so much stronger than good,” Mr. Sutton said in a video on the Stanford Graduate School of Business website. Bad behavior, such as... Read full post

Dec 27, 2013

Keep the 'Wolf' at the door

By Mark Schoeff Jr.

If you're considering going to see “The Wolf of Wall Street,” the new Martin Scorsese film that opened on Christmas Day, you ought to think about an investment that might be better spent elsewhere.No, not in penny stocks or initial public offerings that the movie's protagonist, Jordan Belfort, played by Leonardo DiCaprio, used to rip off unsuspecting customers to fund his lavish lifestyle. You'll have to consider whether to sink 2 hours and 59 minutes of your day into the film.Let me give you some time-investment advice: Don't do it. Like Mr. Scorsese's critically acclaimed “Goodfellas,” a 1990 film about guys trying to make a name for themselves in the Mafia, “Wolf” features a protagonist doing a voice over and occasionally addressing the camera directly.The similarities end approximately there. “Wolf” lacks the element that “Goodfellas” has in abundance – heart. Unlike ... Read full post

Dec 20, 2013

The stage is set for American Funds' comeback

By Jason Kephart

It's been a grueling five post-financial-crisis years for American Funds, but things are finally starting to look up for the mutual fund company, a favorite of advisers.American Funds, which is owned by The Capital Group Cos. Inc., was the largest mutual fund company in the world before Lehman Brothers Holdings Inc. collapsed and set off a chain reaction that caused global stock markets to plummet. But its funds, which famously avoided the bursting of the tech bubble, were merely average in 2008 when the financial crisis started to break. That performance letdown has led to a half-decade in which advisers have fled both stocks in favor of bonds and active managers in favor of index funds. As a result, stock-fund heavy American Funds has seen almost $250 billion of net withdrawals since 2008, dropping it behind the Vanguard Group Inc. and Fidelity Investments in the mutual fund company pecking order. But American Funds has stayed in... Read full post

Dec 20, 2013

Advisers plan to focus on efficiency, but can I suggest another goal?

By Liz Skinner

Financial advisers are looking toward 2014 as the year to make their businesses run like well-oiled machines. At industry events and cocktail parties, they sound determined to find ways of making their firms more efficient. They're talking about plans to examine workflows and create systematic processes that offer a repeatable client experience. Many also are looking at whether being part of an advisory team would be more cost-effective, and are considering mergers. “Advisers are saying they want to make sure that they're more efficient instead of just pursuing growth for growth's sake,” said John Anderson, head of practice management for SEI Advisor Network, which recently polled 800 financial advisers. Having benefited the past few years from stock market growth — the S&P 500 is up 30% so far in 2013 — advisers are skeptical about it's continuing and are looking at other ways to shore up their practices. Most ... Read full post

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