Outside voices and views for advisers

Mar 5, 2015, 3:25 PM EST

Are you making a mountain out of joining social media?

By Craig Faulkner

If there is one thing we encounter over and over at FMG Suite, it's a financial advisers' too-strong-for-reason resistance to trying out social media. Despite the following data from an Accenture study last year, about half of financial advisers are still not actively embracing social media. The study shows that advisers who do use social media enjoy faster and easier communication with clients, increased referral sources and higher client retention.According to the Accenture study of advisers who use social media:• 74% agree that social media helps them increase assets under management • 40% indicate they have gotten new clients through Facebook• 25% have developed new clients through LinkedIn• 21% have earned new clients through TwitterA social media presence has been proven to be an important piece of an effective marketing puzzle, yet so many advisers are reluctant to take the plunge. Why is there still strong... Read full post

Mar 3, 2015, 3:53 PM EST

Back to the future: The Japanification of Europe?

By Nick Gartside

Mention Japan to an economist and she'll tell you about deflation, debt crises, demographic pressures and decades lost in economic stagnation. In fact, the ingredients of every policymaker's nightmare scenario and the situation Eurozone monetary authorities are desperate to avoid. You don't need to scratch under the surface, though, to see that there are some uncanny parallels between events in Japan over the last decade or so and the current situation in the Eurozone, which faces a poor demographic outlook, sluggish economic growth and prospective deflation. Indeed, under certain indicators, the Eurozone looks a little worse than Japan with around one quarter of all Eurozone government bonds now with a negative yield versus none in Japan. This problem is further exacerbated by a political polity that has reacted slowly to the unfolding debt and deflation crisis. (More: The global economy in 2015: Dramatic differences)With... Read full post

Mar 3, 2015, 11:10 AM EST

How to manage equity market uncertainty

By Thomas Hoops

Will the U.S. equity markets keep going up at the pace of the last few years? Affluent investors seem to expect so — the Legg Mason Global Investment Survey showed 85% cited U.S. equities as the best opportunity over the next 12 months, up from 74% at the end of 2013.However, those same survey respondents cited an increase in volatility as one of their top threats — and there has been an uptick in volatility recently. Volatility is not necessarily bad. In fact, it can bring opportunity to active managers. It should be noted that the S&P 500 has not experienced a drop of 10% since 2011. Notwithstanding geopolitical concerns and the global decline in energy prices, the most recent “correction” in the S&P 500 did not exceed October 2014's 5% decline. But can that continue?While not at the extremes of financial crisis periods, one measure of volatility — VIX — has increased.A trademarked ticker symbol... Read full post

Mar 2, 2015, 8:36 PM EST

InvestmentNews 40 Under 40 now taking nominations for 2015 awards

By Jennifer Kenning

Before you think InvestmentNews' 40 Under 40 project is just another nomination, award or list, I have news for you: It is more than that. Why, you may ask? Take it from someone who was chosen for the inaugural class last year. In my experience, it is 40 young professionals — all under age 40 — from across the financial advice industry, in different fields with different insights to share. They include leaders challenging the way we do business, breaking old paradigms into new, creating new lenses by which we serve clients, mentoring those in the next generation and inspiring an industry to think bigger. Our industry will be changed because people of this caliber played a significant role in creating the future of the profession. (Nominate your candidate for the 2015 InvestmentNews 40 Under 40)Being on this list is not only an honor, but an opportunity. These young stars gain a platform to tell their story and raise their... Read full post

Mar 1, 2015, 12:01 AM EST

Tapping the potential of responsible investing by debunking the myths

By Amy O'Brien

Once perceived as a niche area of asset management with relatively limited appeal, responsible investment (RI) has evolved into a diverse, globally recognized discipline, encompassing a wide range of strategies that have gained momentum with all types of investors. Assets managed using RI strategies grew 76% between 2012 and 2014, reaching $6.57 trillion, according to the Forum for Sustainable and Responsible Investment (US SIF). In the U.S. alone, they now account for about 16% of all assets under professional management. The evolution of RI over time reflects both the growing interest in a variety of environmental, social and governance (ESG) issues, as well as the increased availability of funds and other vehicles that include ESG criteria in the investment decision-making process — not just in equities, but across asset classes. These socially responsible investing funds have a dual focus: competitive, long-term investment... Read full post

Mar 1, 2015, 12:01 AM EST

The challenges and opportunities of impact investing

By David Sand

In recent years, the term impact investing has mushroomed to encompass the older labels of SRI (socially responsible investing), MRI (mission-related investing) and ESG (environment, social, governance), among others. Those of us in the field can parse the terms and highlight distinctions that differentiate the various strategies, but at a big picture level, the headline is that change has come to the investment industry. While we are still in the early years of impact investing as a mainstream phenomenon, the transition represents a fundamental and irreversible shift.As a money manager, I see the expanding interest in impact as both a challenge and an opportunity. Advisers and their clients looking to get into impact investing face similar challenges and opportunities. Here are the key issues advisers need to consider:Product proliferation The number of firms dedicated to impact investing is growing, as is the number of impact... Read full post

Feb 27, 2015, 2:19 PM EST

No charitable IRA rollover, no problem. Consider the charitable alt-IRA

By Andrew Hibel

Part 1 of our series described the substantial benefits and limits of charitable IRA rollovers. Perhaps the biggest limit is the fact that the law permitting charitable IRA rollovers is frequently in limbo — it was in effect only two weeks in 2014 — forcing clients to wait, and possibly miss the opportunity. What if you could do something similar to a charitable IRA rollover now, with more clients qualifying, fewer downsides and numerous advantages? You can. We call it the charitable alt-IRA.FEWER LIMITSWith the charitable alt-IRA, clients contribute long-term appreciated securities to a donor-advised fund. The technique follows financial planning best practices by using qualified charitable gifts to offset tax liabilities.Clayton E. Hartman, chief investment officer of IFM Capital Advisors in Fort Collins, Colo., has found that “charitable giving is often an important part of financial planning. I advise clients... Read full post

Feb 25, 2015, 2:59 PM EST

3 big surprises in ETF flows so far in 2015

By Nicholas Colas

With February almost over, we revisit where U.S.-listed exchange-traded fund money flows are pointing. At the beginning of the year, the answer was “nowhere.” Things have since picked up a lot. One-month flows into ETFs now stand at over $30.7 billion, putting year-to-date inflows at $23.9 billion.Big surprise No. 1: U.S. equities may be at all-time highs, but year-to-date flows are negative $18.4 billion, thanks to $28.7 billion out of SPY (the largest U.S.-listed ETF). Surprise No. 2: Fixed-income ETFs are the big winners year-to-date, with $20.1 billion of fresh money — 85% of the total ETF flows so far in 2015. Surprise No. 3: Commodities are back in a big way, with $5.4 billion of inflows. Some $2.8 billion of that went into gold funds and a $3.3 billion into energy-based investment products.POPULAR ON TWITTERThe most popular word on Twitter isn't a word; it's a picture of a heart. Yes, technically, that's an... Read full post

Feb 24, 2015, 3:50 PM EST

Putting the T back in ETF

By Grant Engelbart

Exchange traded funds are exceptional tools for allocating client portfolios, but they can lose their effectiveness if implemented incorrectly. The “T” in ETF is often neglected by both new and long-time users of ETFs. A simple review of the often mystical world that underpins ETF trading can be helpful. To start, ETFs essentially trade in two distinct markets.Let's start with the secondary market — what is referred to as the “on-screen” market. The quotes we all see on the screen when we punch in an ETF ticker is the price one would pay in the secondary market. Trading in the secondary market is very similar to trading a stock.(More: Building a successful ETF portfolio requires more than strategic allocations)The other, perhaps more important market, is the primary market. Only specific “authorized participants,” or APs, and the ETF sponsor can transact in the primary market which are referred ... Read full post

Feb 24, 2015, 12:01 AM EST

To improve portfolio diversification, look to technology

By Jerry Murphey

Today's market environment presents a host of challenges to advisers that necessitate embracing a new approach to portfolio construction — particularly when it comes to diversification — to improve client outcomes. The reality is that the traditional, institutional, buy-and-hold asset allocation model isn't the best fit for all clients. True diversification means having a game plan that takes all of the “what-if's,” market environments and emotional swings inherent in investing into account.EXTREME MARKET EVENTS ARE THE NEW NORMALToday's markets are more complex, fast-moving and unpredictable than ever before; however, investors' general objectives are largely unchanged: they want portfolios that will increase in value and reduce the risk of losses. Diversification has long been a fundamental tool for realizing that goal. The idea, of course, is that having a mix of asset classes and categories in a single... Read full post

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