The Robo Advisors Channel

The Rise Of Robots & The Risk To Passive

In Tuesday’s post, “A Shot Across The Bow,” I discussed the recent “Tech Wreck” and the warning sign that was delivered when trading algorithms begin to run in the same direction.

Addressing Always-Connected Technology

Intensifying demand to have everything at one’s fingertips seems to be the driving force behind the innovation in technology, finance and even industrials. 

Addressing Always-Connected Technology

Intensifying demand to have everything at one’s fingertips seems to be the driving force behind the innovation in technology, finance and even industrials. Franklin Equity Group’s Matt Moberg, vice president and portfolio manager, Franklin DynaTech Fund, observes a general shift in the technology industry to address evolving consumer needs.

A New Definition of Advisors’ Value-Add

Firms that demonstrate “value” will always have clients willing to pay a fee reasonably related to it. It may not matter whether it is a flat or AUM-based fee. But the AUM-based fee has a troubled future.

10 Reasons ESG Investing Is Growing

According to the Global Sustainable Investment Alliance, over $22 trillion of assets were managed under responsible investment strategies globally in 2016, up 25% from two years before. This is one of many statistics showing Environmental, Social and Governance (ESG) investing moving into the mainstream. We see 10 major trends contributing to the rise.

You Might be a Robo-Advisor If…

In a nod to comedian Jeff Foxworthy’s signature “You might be a redneck” shtick, the following parody offers real-life examples of why, contrary to popular perception, talented, experienced financial advisors have absolutely nothing to fear from the invading robot army:

Advisors Find a Road Less Traveled in Fixed Income

There is a small but growing community of advisors who are leaving behind the old ways of picking managers in an effort to give their clients something they can’t get on their own or from a robo-advisor.

Reminder: Valuations are Useless for Market Timing

Adam Butler introduces a simple but novel innovation for modeling equity market valuations. There are reasons to believe average valuations should rise through time in response to changes in market structure. We discuss the conditions that might lead to higher valuations through time, and present a model to account for it.

My Firm is Losing Focus on the Financial Aspects of Planning

Over the last several years the advisory industry has trended away from valuing financial expertise in order to put the emphasis on the relational or human side of investing. This makes sense but we have moved too far in the opposite direction.

The Great Reset, Part Two

Last week I discussed what I think will be the fallout from the Great Reset, when the massive amounts of global (and especially government) debt and the bubble in government promises will have to be dealt with. I think we’ll see a period of great volatility in the markets. I offered a solution for dealing with this complexity and uncertainty in the markets by diversifying trading strategies. But that diversification must reflect a rethinking of Modern Portfolio Theory, including a significant reshaping of valuations in asset classes. We’ll deal with those topics today.

Jack Bogle on the Limits of the Fiduciary Rule and the Future of the Advisory Industry

Speaking two weeks after his 88th birthday, Jack Bogle called the fiduciary rule “silly” and said that financial advisors’ fees are heading lower. Indeed, he said, advisors are destined to charge hourly or retainer fees, like lawyers and accountants.

Are You Oblivious to Fee Compression?

You are my friends and clients. I have great respect for the work you do and appreciate the value you add to the lives of your clients. That’s why it’s painful for me to see so many of you headed for trouble by denying the obvious trend in fee compression.

Why the Future is Bright for AUM-Based Advisors

Over the past several months, I have been reading Dan Solin’s thought pieces in Advisor Perspectives[1] and believe his gloomy outlook for the planning profession, and, more specifically, for advisors who are compensated via AUM-based fees, is misguided.

Why Do So Few Individuals Seek Professional Financial Advice?

Although 76% of respondents to FINRA’s 2012 national financial capability study reported not being satisfied with their personal financial situation, very few sought financial advice, with 9% seeking debt counseling and 30% seeking insurance advice. This discrepancy motivated our research paper titled “Who Seeks Financial Advice?” This article summarizes the key findings from that research.

What Do the Recent SEC Robo Guidelines Mean for Advisors?

New SEC guidance provides effective ways for advisors to comply with disclosure regulations.