Latest research and trends from around the financial advisory business, updated regularly highlighting stats, charts, infographics and all things data.
Jan 18, 2015, 12:01 AM EST
Headlines and financial pundits warned investors a year ago that, with the Federal Reserve's third quantitative-easing program coming to an end in 2014, the long-awaited rise in interest rates was upon us. Although it took until October for the Fed to wind down its bond buying, markets had a radically different reaction than had been forecast: Bonds rose in value.Not all types of bonds went up, of course. Junk bonds were crushed in the fourth quarter (especially in December) as concerns about a global economic slowdown far outweighed the consequences of ending the Fed stimulus. For bond exchange-traded-fund investors, the clear winners were products holding long-duration Treasuries, such as Pimco 25+ Year Zero Coupon U.S. Treasury Index (ZROZ), which rocketed 15.0%, and Vanguard Extended Duration Treasury Index (EDV), which barely trailed with a 14.4% return.... Read full post
Jan 18, 2015, 12:01 AM EST
In the fall, cautious investors were bombarded with mixed news, ranging from continued eurozone weakness and new cases of Ebola in the U.S., to a major slump in oil prices. But better-than-expected U.S. economic news and fresh interventions by global central banks in the fourth quarter pushed local indexes to new records, albeit at the margins. For fourth-quarter 2014, equity ETFs posted their ninth quarter in 10 of plus-side returns, with the average equity exchange-traded fund's three-month return at just 0.01% as investors embraced reports that the U.S. economy had outpaced growth in most other developed nations and thus shied away from global markets. Investors began selectively focusing on interest-related, out-of-favor and relatively safer domestic equity issues. Investors were kept in the game by reports that the Chinese and European central banks were laying the groundwork for quantitative easing and asset purchases, strong U.S.... Read full post
Jan 9, 2015, 1:23 PM EST
If the past is any indicator, adviser moves are likely to pick up steam in the first quarter, according to an analysis of InvestmentNews' Advisers on the Move database, which tracks teams of advisers and brokers changing firms.We expect our initial tally of recent fourth quarter-end activity to expand by approximately 10% as prior adviser move announcements and reporting trickles in, boosting fourth quarter activity to approximately $18 billion of adviser AUM. That revised sum would place activity flat versus the prior quarter.But if the cyclical nature of adviser moves in the past is any guide — and economic and other fundamentals hold steady — adviser move activity is set to pick up in earnest in 2015, and we are forecasting a pickup in assets moving by an average of approximately 15% in 2015. Summers have been particularly active, and the third quarter of 2015 could see record activity in our database.... Read full post
Dec 21, 2014, 3:12 PM EST
Donor-advised funds, which provide clients with an easy way to give to their favorite causes, experienced a sharp pickup in popularity during 2013. Advisers have turned to them as a way to help philanthropically inclined investors offset capital gains taxes, particularly in light of the American Taxpayer Relief Act of 2012 and the five-year bull market. Fidelity Investments topped the list in both grants and assets in 2013, but the Silicon Valley Community Foundation experienced the most dramatic growth between 2012 and 2013.... Read full post
Dec 17, 2014, 3:18 PM EST
Variable annuities are a staple of broker-dealers' business, offering clients the opportunity to garner market exposure on a tax-deferred basis. In recent years, however, sales of indexed annuities — which credit interest to a client's account — have climbed, particularly as advisers seek a fixed-income alternative with an optional guaranteed living benefit feature. Indexed annuities continue to boom in popularity as insurers release products intended specifically for the wirehouse and broker-dealer channels, in addition to their lineups for independent agents. In the variable annuity space, Jackson National continues to dominate sales. Meanwhile, Allianz Life of North America keeps a tight grasp of market share in the indexed-annuities arena.... Read full post
Dec 15, 2014, 11:39 AM EST
There are a lot of figures that get thrown around about attracting new clients in the advisory industry. One that we frequently hear at InvestmentNews Research is that approximately 70% of a typical advisory firm's new business is referral-driven. In a 2012 study we conducted, the typical firm had earned nearly 50% of their new revenue in the prior year from client referrals alone. If professional referrals are included, that figure jumps to 70%, positioning referrals as by far the number one source of new business.In this year's InvestmentNews Financial Performance Study of Advisory Firms, we asked advisers: Do you have a formal, standardized process in place at your firm for asking for referrals from both third-party professionals and existing clients?What we found surprised us. Only about one out of every three firms have a formal process, which tells us that firms often take a passive approach to a strategy that accounts for the... Read full post
Nov 20, 2014, 7:27 AM EST
Today we launch the InvestmentNews 2015 Adviser Technology Study survey. Join the conversation and take the survey now.We do a lot of research here at InvestmentNews around practice management, from taking the pulse of advisory firms' financial performance to benchmarking the compensation and staffing of the elite firms in the industry. But after analyzing a firm's financial health and the single biggest factor on their bottom line — staffing — what practice-oriented feature affects advisory firm performance most?Tech is at the root of just about every basic function of today's advisory firm. Not only does it help advisers run their business — from cloud applications that have replaced servers to software solutions indispensable to business development such as customer relationship management software — it is also often central to the client service experience and acting at the heart of their marketing apparatus.... Read full post
Oct 16, 2014, 11:20 AM EST
Each year, InvestmentNews' benchmarking series looks at how top-performing firms rise above market conditions and industry competition to set themselves apart. This year's study — the InvestmentNews 2014 Financial Performance Study of Advisory Firms — is no different.With the industry's continued, unprecedented growth in 2013, we developed a methodology to identify top performers by not only quantitatively measuring the financial performance of participating firms, but also measuring stress factors such as owner income and earnings before owner compensation. By doing this, we were able to isolate the factors that contribute to an individual firm owner's success and the impact it has on firm development. Top performers represent the top quartile of a rank of more than 300 participating firms based on a composite of the following firm metrics:Revenue per professional: The amount of revenue generated per client-facing... Read full post
Oct 8, 2014, 3:45 PM EST
2013 was another period of sky-high revenue and AUM growth and strong profit margins at advisory firms, according to the InvestmentNews 2014 Financial Performance of Advisory Firms. More and more, the modern advisory firm is looking like a business rather than the small practice of the past. That maturation process has been accompanied by an evolution in the way firms monitor and sustain their success. There are many narratives at work in this period of asset and revenue acceleration, so we asked the experts to provide insight into this year's study results. In our recent webcast, research and consulting pros Philip Palaveev, Brandon Odell (both of the Ensemble Practice and partners of InvestmentNews Research on the Excellence in Practice Management Research series), and Mark Tibergien, CEO and managing director of Pershing Advisor Solutions, break down the results.The slides below accompanied the webcast, and offer a glimpse at what... Read full post
Sep 5, 2014, 3:12 PM EST
As technology changes the way investors work, communicate and invest, new opportunities for advisers are emerging. At InvestmentNews Research we wondered: How are clients' financial goals evolving, and how can advisers best meet their needs? We surveyed nearly 1,000 investors, gauging their appetites for financial advice. We separated them into two camps, those who already work with a financial adviser, and those who don't: the DIY investor. In a companion survey, we asked over 500 advisers how they believed their services and business models would change, with investor demand in mind, in the near- and long-term. Click through the slides below for some of the top-level findings of our research, in what is the first installment of our three-part "Future of Advice" series.... Read full post
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