Outside voices and views for advisers

Sep 16, 2014, 9:21 AM EST

Bob Doll: Why the bull market isn't ending anytime soon

By Robert C. Doll

The upcoming Federal Open Market Committee (FOMC) meeting has drawn quite a bit of attention amid increased speculation that the Federal Reserve may start signaling its long-awaited move to increase rates. Retail sales were quite strong in August and the positive reaction to Apple's upcoming product launches dominated corporate news. The geopolitical backdrop did not seem to affect the markets, with President Obama's statements about ISIS containing few surprises, tensions between Russia and Ukraine remaining on the back burner and reactions to the upcoming Scottish independence vote relatively muted. SIGNALING A SHIFTAll eyes will be on this week's FOMC meeting, with many observers expecting the central bank to drop the phrase “considerable time” when discussing how long it intends to keep the fed funds rate anchored at zero. Should it do so, it would give the Fed more flexibility in its approach to monetary policy and... Read full post

Sep 16, 2014, 12:01 AM EST

Europe the place to go for equity value

By Philippe Brugere-Trelat

For some years, many investors felt that the succession of financial and sovereign debt crises would overwhelm Europe, leading to talk about country defaults, a collapse of the single currency, and even the breakup of the European Union (EU). More recently, though, conditions appear to have improved.There is now a great deal of interest in European equities; it's evident that flows into European equities have been pretty strong recently, which helps to explain the strength of the euro. Even so, it appears to us that many investors may still not be as invested in the region as they have been in the past.In June, the European Central Bank (ECB) gave compelling new reasons for investors to take an active interest in Europe. The package of measures was extensive and included not only a further reduction in its main interest rate for lending to banks, but the first-ever negative deposit rate to be implemented by a major central bank. This... Read full post

Sep 11, 2014, 4:56 PM EST

Here's why markets shrugged at Obama's message

By Paul Schatz

On Wednesday night, President Barack Obama announced an expansion of the campaign against the Islamic State in Iraq and Syria with targeted airstrikes in Syria. And as we have seen so many times over the past 10 years, the financial markets responded with a big yawn as if to say that, financially, nobody really cares. (See also: Advisers and investors take new military action in stride)Are investors being complacent or realistic?My theory on geopolitical news is twofold. First, reaction depends on how solid a footing the markets are on. Cherry-picking with the benefit of hindsight, let's look at what happened in July 2006 when Israel and Lebanon were involved in an armed conflict. Stocks peaked in early May and sold off roughly 10% to their momentum low in mid-June before the fighting ever began. After a feeble market bounce, the news out of the Middle East took a turn for the worse in mid-July and stocks sold off again with the strong ... Read full post

Sep 10, 2014, 4:09 PM EST

Apple's big lesson for advisers

By Matthew Halloran

Unless you live under a rock, you know that tech giant Apple Inc. made a big announcement Tuesday. As usual, the world freaks out, the company's stock goes up (and then down again), and bunches of people run to preorder and purchase the new products and services. So why is Apple so successful and how can you use Apple's marketing strategy in the financial services industry to be successful? Well, there have been books written on this, so I'm not going to take up an enormous amount of your time. I'm going to make this hard and fast. (See also: Some unlikely funds “overweight” Apple.)It is easier to sell an existing client a new product or service than it is to gain a new client. We seem to forget this plain fact in the financial services industry. We are always looking for new client households instead of selling back into our existing book. Some of you might be saying right now, “Oh, Matt, I've already sold... Read full post

Sep 9, 2014, 11:41 AM EST

What IBD consolidation means for advisers

By By Jodie Papike

Consolidation in the independent broker-dealer universe has continued at an all-time high over the past few years, but the trigger points are not what they used to be. Going back to 2008 to 2012, many broker-dealers were faced with simply trying to survive. Client arbitrations, rising compliance costs, problems with products and struggling markets made profitability at a lot of firms weak. Many firms were forced to either sell or face going out of business. The environment since the end of 2012 has changed dramatically. Of the largest 75 independent broker-dealers that I follow, not one faced shrinking revenue in 2013. Broker-dealers are doing well. Even firms that struggle with recruiting new advisers are seeing organic growth push their gross revenue to pleasing numbers. So why are we seeing so much consolidation? Temptation.There has never been a time where multiples have been so high for broker-dealer owners to sell. Many of the... Read full post

Sep 9, 2014, 4:26 PM EST

SEC takes a hard stance on soft dollar abuses

By Les Abromovitz

The SEC recently announced sanctions against a broker-dealer in New York for ignoring red flags and making improper soft dollar payments to a San Diego-based registered investment adviser. The broker-dealer paid more than $400,000 to the RIA, even though the advisory firm failed to make full disclosure of those payments to clients and should not have been compensated.WHY SOFT DOLLARS RAISE COMPLIANCE ISSUESSoft dollars are credits or rebates from a brokerage firm on commissions that clients pay for trades executed in an RIA's client accounts. Regulators are skeptical of soft dollar arrangements because they might cause an RIA to breach its duty to seek the best execution of securities transactions. Receipt of soft dollars might also cause the client to pay more than the lowest available commission.Soft dollar credits raise questions as to whether an RIA has breached its fiduciary duty. Because soft dollar credits are derived from... Read full post

Sep 9, 2014, 3:57 PM EST

Helping advisers unlock their full value

By Robert J. Moore

"Time is precious. So it is important to lead a meaningful life." This lesson was delivered with tremendous power to over 5,200 attendees at our firm's annual focus 2014 conference, held recently in San Diego for our clients, sponsors, employees and guests. The messengers on this occasion were Bob Woodruff, the former ABC anchor and journalist who sustained life-threatening injuries on assignment in Afghanistan, and his wife, Lee, who led their family through a long and difficult recovery. Their profound remarks served to underscore the perennial message from our conference, which is a reminder that financial advisers' work is suffused with meaning. Advisers help clients manage some of the most important and profoundly personal aspects of their lives: their personal finances, assets and wealth, which are the fruits and rewards of a life's labors, as well as the protections against life's inevitable setbacks. The question for financial... Read full post

Sep 9, 2014, 3:52 PM EST

Are you prepared to make an exit from the stock market?

By Axel Merk

If the Federal Reserve pursues an “exit” from its ultra-low interest rate policy, are you be prepared for an exit from the stock market, should things turn south? There's a group of investors that say an “exit” is ludicrous – there's no way the Fed will pull off an exit. It turns out we sympathize with that view, but think getting ready for a Fed exit is still paramount. This is because just the hint of a Fed exit might cause havoc in the market, even if it is never actually pursued. What not to do is a lot easier to say than what to do. Here are five common mistakes investors make:• Feeling like you're losing out because you're not keeping up with the stock market. No: you should develop a financial plan tailored towards your circumstances. You should not care how much the guy or gal next to you, or the “market” makes.• Feeling like you haven't saved enough for retirement and as a... Read full post

Sep 8, 2014, 3:28 PM EST

How advisers can help solve the student loan crisis

By John Collins

With student loan debt officially reaching the trillions, the U.S. Executive Branch, the Consumer Financial Protection Bureau and the general public are worried about the effect of this massive debt on the American economy — and they should be. This marketplace propels itself forward by issuing more and more student loans, both federal and private, that lead to ever-increasing tuition costs and, in turn, a higher risk that student borrowers will be unable to satisfy their debt. I often see this crisis compared to that of the 2008 subprime mortgage meltdown, but the truth is the student loan crisis has the potential to be far worse. (Don't miss: 8 secrets advisers used to pay for their kids' college)Because the majority of these loans are non-dischargeable in bankruptcy court, these students have walked straight into a debtor's prison — a prison fortified with the long-term trend of tuitions rising faster than inflation,... Read full post

Sep 8, 2014, 3:27 PM EST

How to mobilize your practice

By Blane Warrene

Mobile readiness may sound like something other companies have to deal with. However, the days of being mobile-friendly as an option are over.What exactly is mobile readiness? For our purposes here, it's the ability for visitors to your website to enjoy the same experience and content regardless of the form of the device they are using (e.g., desktop, laptop, mobile device). We'll return to this in more detail shortly. First the indicators.Traffic on websites from the traditional web browser is in slow decline, with as much as 20% of all consumer (read investor) traffic coming from smartphones and tablets. That's a 10% jump over 2013, according to the authoritative Internet Trends report authored annually by Mary Meeker of venture capital firm Kleiner Perkins Caufield Byers.An interesting distinction about that mobile traffic reported on CNN earlier this year was that a big portion of that traffic is from individuals coming through... Read full post

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