By most measures, 2022 won’t go down as a great 12 months for investors or for the advisers guiding their finances. While not quite an “annus horribilis” on the order of 1929 or 2008, the year was marked by soaring inflation, a sinking stock market and a bond market torpedoed by steadily rising interest rates.
In this issue, InvestmentNews journalists look at 2022 through the lens of their individual coverage areas and offer a balanced recap of the year’s events. What follows — in the spirit of the 12 days of Christmas, the eight days of Hanukkah, the seven days of Kwanzaa and the beginning of the long march to summer heralded by the winter solstice — is a much cheerier (and more irreverent) recap of a dismal year.
The years-long transition from mostly commission-based revenue to mostly fee-based revenue has done wonders for the ability of advisers and their firms to weather a storm. Instead of revenue taking a dive along with the Dow, firms didn’t have to scramble for reasons to write tickets in 2022. Fee income may have slipped due to declining asset values, but advisers and their firms were being able to take the downturn in stride. In fact, sitting tight is now not just in clients’ best long-term interests, it’s in the industry’s, too.
The bond market took a beating in 2022, and municipal bonds weren’t exempt from the drubbing. On the whole, as measured by the S&P Municipal Bond Index, munis were down 12.5% for the year through the end of October. Then the clouds broke and the index started rising. Now the yearly loss should be around 7%. Sure, less of a loss is still a loss, but for wealthier investors in high-tax states, muni bonds now offer very attractive tax-equivalent yields. And if advisers can use any capital losses in munis to offset capital gains elsewhere — maybe from the sale of real estate — so much the better. Who needs a hot stock when you’ve got boring bonds?
What if a hot sector in financial markets imploded and — not much happened? That’s the welcome news from the otherwise depressing collapse of FTX and the meltdown of the cryptocurrency market. Sure, many ordinary investors who shouldn’t have been in such a high-risk “investment” in the first place lost everything. That is a tragedy for them and their families. But even some supposedly smart money people got burned, like “Shark Tank” personality Kevin O’Leary, who at first didn’t like crypto, then liked it, and now doesn’t like it anymore. O’Leary says he “lost” $15 million of the money he was paid to be an FTX spokesman during the period he liked crypto. Too bad for Kevin. But for the financial system, the fall of FTX has been a blessed nonevent. No liquidity freezes, no cash crises, no banks being saved, no middle-of-the-night Federal Reserve meetings. Hallelujah!
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.
"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
Chair also praised the passage of stablecoin legislation this week.
Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
