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InvestmentNews reporters offer their take on intriguing or controversial articles from around the web.

Sep 11, 2018

Behind the scenes: “Impact” cost me 15 pounds but the payoff has been priceless

By Matt Ackermann

It is 3:14 in the morning. With my wife's robe as a pillow, I am curled up in a ball on my bathroom floor, in absolute physical agony, and I couldn't be happier.Maybe I should rewind.You see, about 18 months ago, I was sitting in a meeting with a potential new partner and began mindlessly daydreaming when a booming voice asked an open-ended question that jolted me into a new reality.“What about you? What would you do if you could do anything you wanted,” asked Vanderbilt's Steve Distante.I answered immediately, “I'd make a documentary.”Steve laughed because, without knowing, I had just stumbled into one of his passions. I had also stumbled into the executive producer of our new video project, Impact.“What do you think about impact investing,” he asked.I had no idea that with two simple questions, the direction of my life was about to change forever and send me on an exciting new journey.This journey... Read full post

Sep 6, 2018

Trump administration hypocrisy on retirement security

By Greg Iacurci

Is President Donald J. Trump a hypocrite when it comes to retirement security? His actions certainly suggest so.On Aug. 31, Mr. Trump signed an executive order meant to strengthen retirement security by expanding access to workplace retirement savings plans for American workers. Specifically, relaxing rules around multiple employer plans would "make it easier for businesses to offer retirement plans." This announcement was celebrated with great fanfare from the retirement industry and members of Congress. However, Mr. Trump took measures last year that seemingly flew in the face of the so-called retirement security he is now promoting. Primarily, the president signed a resolution killing a rule around state auto-IRA programs; he signed a similar resolution on city auto-IRA programs earlier in 2017. His administration also dissolved the Treasury Department's myRA program. These initiatives, started during the administration of Barack H. ... Read full post

Aug 31, 2018

Ken Fisher, famous annuity hater, invested in annuity companies

By Greg Iacurci

Ken Fisher, founder and executive chairman of Fisher Investments, has been an ardent critic of annuities for years. In fact, Mr. Fisher's vitriol toward annuities is probably one of his most identifiable characteristics in the public sphere. Print ads with Mr. Fisher's face blare, "I HATE Annuities. And you should too." More recently, in a video ad for Fisher Investments, he says, "I would die and go to hell before I would sell an annuity."However, Mr. Fisher's company, among the largest financial advice firms in the country, was simultaneously investing in insurance companies with significant annuity business. And some of the stakes were quite large. Specifically, Fisher Asset Management — the legal name for Fisher Investments — held several million shares of stock in American Equity Investment Life Holding Co., one of the biggest sellers of indexed annuities, and Prudential, the parent company of Jackson National Life... Read full post

Aug 30, 2018

Schwab abandons plan to build multi-custodial portfolio management tool

By Ryan W. Neal

Schwab Advisor Services is getting closer to finally releasing a next-generation portfolio management technology, but it will not be the multi-custodial tool it promised advisers years ago. The upcoming release of PortfolioConnect will now be a "streamlined platform" built directly into the Schwab custodial platform, according to a blog post by Technology Tools for Today president Joel Bruckenstein. This would eliminate the need for daily custodial downloads, data integrations or reconciliation required by third-party tools, which can consume a large portion of an independent adviser's technology budget. Mr. Bruckenstein suggested that Schwab is planning a free version of PortfolioConnect for advisers who exclusively custody with Schwab, making for a more efficient and cost effective tool for these firms. It appears Andrew Salesky, the new senior vice president of digital adviser solutions at Schwab, made the decision to abandon... Read full post

Aug 27, 2018

How to offer the ideal hybrid digital adviser

By Ryan W. Neal

The digital era of financial advice is so new that the landscape is still largely uncharted for many firms. While there are some success stories, there isn't really an authoritative road map on how to best implement a digital advice strategy. Even some of the largest firms, with vast amounts of money to throw at technology, have struggled. Advisers are told they need a hybrid strategy, one that leverages technology to support human advisers and let them serve a greater number of clients across demographics and asset levels. But what exactly would the ideal platform look like? My advice as a millennial technology reporter and full-time nerd is to look outside the financial services industry entirely. Not to knock the tech-focused firms doing very cool things with technology, but for my money, no one can yet match the service provided by online retail startups. One in particular,, has fused the online shopping experience... Read full post

Aug 15, 2018

'Billions' star Maggie Siff touts Betterment in new ad campaign

By Ryan W. Neal

Betterment has a new advertising campaign that employes the talents of actress Maggie Siff, who currently plays psychiatrist Wendy Rhoades on the Showtime series "Billions." In the 30-second TV spots, Ms. Rhoades tells investors, "Don't settle for average investing. Demand Better." Using Betterment's digital, automated investing service, investors can "outsmart average." "The law of averages promises everything evens out in the end. That's not true, and that's not you," Ms. Rhoades says in one of the ads. "Betterment is designed to break the law of averages with tax efficient technology and personalized advice." You see what Betterment is going for here. No one wants to be average, especially when it comes to investment returns. It's a sleek ad with a compelling message, featuring a star from a popular show about successful investors. The music is pretty dope, too. But it's interesting to see Betterment put a negative spin on the word... Read full post

Aug 7, 2018

Enough with the surveys saying millennials need to save more for retirement

By Ryan W. Neal

A new survey finds many millennials are spending more each month on restaurants, clothes and coffee than they are saving for retirement. It must be a Tuesday. If you haven't heard, my generation loves coffee, avocado toast and killing beloved American industries all while refusing to move out of our parents' house.​ The latest data, a LendEDU poll of 1,000 Americans age 22 to 37, finds that nearly half of millennials are spending more money on restaurants and dining out than they are putting into retirement accounts. Thirty-two percent spend more on clothes than they save, and more than a quarter reported spending more on coffee, alcohol and online streaming services. Thirty-seven percent aren't saving for retirement at all. Before the older generations' bellyaching gets too loud, keep in mind that 22 to 37 is a huge age range, and factors like employment and income level factor heavily. A 22-year-old could still be in school ... Read full post

Aug 2, 2018

Fidelity's zero-cost funds raise issues for 401(k) advisers

By Greg Iacurci

Fidelity Investments is making 401(k) advisers' lives a little more complicated. The Boston-based behemoth dropped some eye-popping news Wednesday: as of Friday, it will begin offering two index mutual funds with a price tag of 0.00%. Yes, funds free of cost to investors — the industry's first. The funds, in the total-market and international equity categories, will be available to retail investors. They won't be offered to participants in defined-contribution plans, at least initially. But let's not kid ourselves — it's only a matter of time before Fidelity or another index-fund giant, perhaps BlackRock Inc. or Vanguard Group, brings a no-cost fund to 401(k) investors."It could be a fire-starter," said Philip Chao, principal and chief investment officer at Chao & Co. It wouldn't be a surprise. No-cost funds represent the extreme of a trend that's been playing out for years in retirement plans. The average asset-weighted... Read full post

Jul 27, 2018

Is it better to meet with clients in person or online?

By Ryan W. Neal

Is it better to meet with a client in person, or virtually? It depends on who you ask. According to research from FactSet, a data analytics provider, high-net-worth individuals now conduct 44% of their interactions with an adviser online. The number is lower among sub-$1 million investors, but jumps up to 48% for investors with wealth exceeding $20 million. A separate study from Hartford Funds found the frequency of client interactions is skyrocketing. Two-thirds of the advisers surveyed already interact with their clients on at least a weekly basis, either to discuss investment strategy or simply touch-base. A third of advisers expect interactions to increase by 50% in the next five to 10 years, a rate that surely couldn't be sustained by in-person meetings."As advisers thread the needle and both communicate more frequently and meet in person, it's essential that they embrace firm-approved digital alternatives (like video chat) that... Read full post

Jul 16, 2018

Writing on the wall for direct-to-consumer robo startups

By Ryan W. Neal

The consolidation of direct-to-consumer robo-advisers is in full swing. Hedgeable, an early digital adviser that stood out for targeting wealthier clients with active management, hedging strategies and access to alternative investments like venture capital funds and cryptocurrency, announced last week that it will discontinue its investment management service on Aug. 9. The news comes just two months after Northwestern Mutual's decision to shut down LearnVest.​ In December, Amanda Steinberg closed WorthFM, a female-focused robo-adviser launched in 2015. The WorthFM website, which now directs users to Sallie Krawcheck's Ellevest, cites "industry shifts and our own business" as reasons it can no longer offer investment advice. The announcement from Hedgeable was surprising, but not entirely unexpected. Industry observers have long forecast doom for the direct-to-consumer startups not named Betterment and Wealthfront as banks,... Read full post

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