Outside voices and views for advisers

Aug 20, 2014, 2:54 PM EST

Is fear stunting your growth?

By Steve Sanduski

If you had no fear, would you be running your business and living your life exactly the way you are today? The following chart will help you determine just how much fear rules you. Take a look at the two columns.How many “Fearful” items describe you?... Read full post

Aug 19, 2014, 8:02 AM EST

3 lessons female advisers can learn from Lauren Bacall

By Kathleen Burns Kingsbury

Hollywood legend Lauren Bacall died last week at age 89. When I heard the news, I took a moment to remember her work on the screen, her life behind the scenes and how she had a profound impact on me as a young girl.... Read full post

Aug 19, 2014, 3:38 PM EST

El-Erian: Why are bonds and stocks acting strangely?

By Mohamed A. El-Erian

The past week saw a dynamic in financial markets that, not long ago, would have been deemed quite unusual: Prices of all kinds of assets, from safe government bonds to risky stocks, rose together. German bunds and U.S. Treasuries gained, pushing yields lower, as the Standard & Poor's 500 Index approached its all-time high.The movements continued to confound the once-traditional pattern, in which bond prices rise and stock prices fall when investors expect the economy to perform poorly, and vice versa. There are various explanations, some more consequential than others.One interpretation is that investors expect hyperactive central bankers to remain their best friends, buoying markets with continued unconventional policies. Last week's disappointing economic data out of the U.S. and Europe would support this view, putting pressure on the Federal Reserve and the European Central Bank to be more accommodative than they otherwise would.By... Read full post

Aug 19, 2014, 8:55 AM EST

Evaluating liquid alts? History offers some lessons

By David F. Sand

I was a history major in college and I am often asked what use I have made of that training during three decades of working in investment management. I usually mumble something about “cycles” and “history repeats itself.” A more honest answer is that there are many historical quotes and sayings that, if twisted a little, have great bearing on investing today. • “Ask not what you can do for the market, ask what the market can do for you.” (Apologies to JFK).• “Never have so few taken so much from so many.” (Sorry, Mr. Churchill).• And the saying with the greatest resonance for investing today, “We have nothing to fear, but the lack of fear itself.” (Forgive me, FDR).Investors in the equity markets have commented on the historically low levels of the VIX, popularly known as the “fear gauge.” Stocks are at high levels, cross border takeovers are... Read full post

Aug 15, 2014, 4:00 PM EST

Why separately managed accounts are undergoing a rebirth

By Thomas Hoops

A class of products that have been around for a long time are undergoing a rebirth: separately managed accounts, or SMAs. The recent sales figures have been impressive. SMA market assets have bounced back to levels last seen before the financial crisis — more than $762 billion at year-end 2013, according to Cerulli Associates Inc., with one-year growth of 23.1%. Cerulli Associates projects growth rates in separate accounts of 11.3% to 12.2% in each of the next four years.The success of SMAs lies in their advantages: customization, transparency, tax efficiency and professional management. They can also offer flexibility in fees and a high value perception for clients attracted by the cachet of owning a professionally managed strategy in a more exclusive wrapper.The concept is easy to explain, one reason that SMAs are gaining traction with clients. They fill the needs of retail investors wealthy enough to invest $100,000, and in... Read full post

Aug 14, 2014, 3:24 PM EST

How to help clients take on the right amount of risk

By Charles Goldman

Strong stock market performance put big smiles on the faces of investors as they watched account balances grow over the past two years. But a lack of insight about how equity markets really work, and a desire to “get returns like the S&P,” may have led many investors to take on too much risk. Just when investors began to feel that the equity market climb was unstoppable, stocks recently reversed course. In one day recently, the Dow erased all of its 2014 gains. When markets become shaky, which they always do, financial advisers have the opportunity — and challenge — to help their clients avoid making harmful, emotionally driven decisions. THE CHALLENGEThe fact is that clients are confused about risk, and they need both education and confident guidance from their advisers. We recently conducted a study that focused on clients' views about investment risk and reward.The study revealed a high level of investor... Read full post

Aug 13, 2014, 3:18 PM EST

Rethinking succession planning by putting clients first

By David Canter

When it comes to succession planning, we are seeing positive changes in the advice profession. According to our research, more firms have written succession plans than in years past, and importantly, more firms are focused on how thoughtful succession and continuity planning can serve as an effective growth mechanism. All you have to do is “rethink” it. No matter what your firm's succession path may be, whether it is an internal transition or you plan to merge or sell, firm leaders should ask themselves: will this transition provide the firm the resources it needs to better serve clients now and for generations to come? To “rethink” succession, it's about the advisory client and the future of the firm, not any one person. The good news? We are beginning to see the tides change in this direction — more and more firms are applying this mentality to their succession strategies. For many small firms whose... Read full post

Aug 12, 2014, 4:01 PM EST

Larry Roth: Defining the next 10 years for independent broker-dealers

By Larry Roth

When the independent advice business began to gain serious traction more than two decades ago, it was supported by the growth of independent broker-dealers bringing together like-minded advisers who could focus on serving clients with a true sense of ownership. The primary focus then was to be free of the quotas, competing agendas and bureaucracy that had come to define life at wirehouses. Over the past decade, the commentary among “experts” has transitioned to how independent broker-dealers must move toward amassing scale under monolithic organizations, as operating costs and regulatory requirements have escalated and independent advisers seek more sophisticated tools to help them build their businesses. Despite all the changes that have occurred, the industry hasn't finished evolving, and the prophets of massive scale likely will be proved wrong. In fact, I believe another major step in the process is right around the... Read full post

Aug 8, 2014, 3:45 PM EST

IRA moves that won't get you in trouble

By Robert Cirrotti

Earlier this year, the retirement industry was surprised by a Tax Court ruling that changed the interpretation of the number and timing of rollovers an individual retirement account owner could direct. The tax court determined that IRA rollovers are limited to one per individual, per year. Prior guidance, including in IRS Publication 590, interpreted the rules to allow one rollover per account. On March 20, the IRS released announcement 2014-15, indicating that the IRS will begin to apply the Bobrow interpretation to rollovers starting Jan. 1, 2015. (See IRA expert Ed Slott's take on the Tax Court's decision and IRS response.)For the once-per-year IRA rollover rule, a rollover means a distribution from an IRA that is payable to the IRA owner and rolled over to the same or another IRA within 60 days. This is different than a direct transfer (or trustee-to-trustee transfer) of IRA assets from one IRA to another IRA. That means that when... Read full post

Aug 7, 2014, 6:53 PM EST

When she earns more: Tips for working with couples

By Kathleen Burns Kingsbury

As women's economic power continues to rise, the definition of what it means to be a couple is shifting. According to Farnoosh Torabi's new book, "When She Makes More" (Hudson Street Press, 2014), the percentage of married couples with higher-earning wives is four times greater than it was in 1960. These women tend to be college-educated and upwardly mobile. Their husbands either stay at home with the children or take lesser paying jobs so they can support their wives' high-powered careers.As a financial adviser, these modern couples require you to be more flexible and open-minded than ever before. The good news is if you can adjust your style to cater to these powerful women and their partners, your business is likely to skyrocket in the coming years. Successful women who bring home the bacon are intelligent, driven and impatient with financial advisers who pigeonhole them into traditional gender stereotypes. To advise these women... Read full post

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