What to Watch Out for When Outsourcing Investment Management
Ever since the growth of robo advisors began to accelerate nearly a decade ago, the dominant trend facing advisors has been the commoditization of investment advice. With the proliferation of high-quality, low-cost investment solutions, advisors have increasingly outsourced their investing, freeing up valuable resources to help clients in other ways. But that doesn’t mean that all outsourced solutions are created equal or that advisors cannot add value through the investment choices that are made on behalf of their clients. Here’s what advisors need to know when choosing an outsourcing solution.
How Leading Advisors Select Technology Solutions
The most successful advisory firms are building their technology framework around their optimal client and the experience they want to deliver to that client. What’s most important when designing an experience is considering how it adds value to the advisor-client relationship.
A Top-Performinng Asia Value Fund
Value investors have fared poorly over the last decade, as traditional value indices have trailed their corresponding growth counterparts. But that doesn’t mean that all value funds have done poorly. Indeed, one notable exception has been the Matthews Asia Value Fund (MAVRX).
The Role of Alternative Investments
With equity valuations at elevated levels, subdued economic growth due to changing demographics and stubbornly low productivity gains, as well as a bleak outlook for fixed income, advisors are challenged to rethink foundational portfolio elements of investor portfolios—which means seeking out strategies that bolster the core going forward.
The Failure of Conventional Financial Planning
There are three legs to the retirement problem: determining an appropriate savings and spending plan, having the right amount of insurance, and constructing an appropriate portfolio. Achieving those three goals and smoothing consumption, especially during the critical period just before and after retirement, is a complex and computationally intensive undertaking.
Achieving Financial Wellness
- American investors are confronted by accelerating complexity, sub-par returns and minimal coordination between their assets, investment strategies and underlying liabilities. When one considers that millions of investors struggle with the same challenges, you realize that America’s multi-trillion-dollar personal savings market is plagued by systemic inefficiency.
What to Expect from Envestnet and MoneyGuide
Nearly two million financial plans were created in the last year using MoneyGuidePro. The two individuals who are charged with overseeing the success of the acquisition of PIETech, the parent company of MoneyGuide Pro, discuss what that means for their clients.
How Should Advisors Evaluate Model Portfolios?
As advisors have expanded their suite of financial planning services and sought new ways to add value to their client relationships, they have also committed to solutions to streamline their investment management. One of those solutions is a model portfolio, which consist of allocations to a group of mutual funds that meet the goals and risk tolerances of their clients.
Understanding Multifactor Portfolios
While there are many ways to gain individual exposure to the value, size, quality, momentum and low volatility factors, multifactor strategies combine exposure to all of them. Choosing the right one for client portfolios is incredibly difficult.
Beyond Traditional Asset Management
- The traditional role of asset managers has been limited to investment management, which is understandable considering the challenge of consistently delivering superior returns. While many asset managers provide resources and education to advisors, rarely do they make that part of their core mission.
The Changing Landscape of Investment Offerings
In the aftermath of the global financial crisis, many individual investors were left questioning the effectiveness of their investment strategies. While many believed their portfolios were well-diversified, as the financial system faltered, they saw a large portion of their investments decline. Investors have grown weary of fund managers who profess to provide excess returns, while gains they realize are diminished by fees. Investors are more keenly focused on portfolio risk and efficient, cost-effective implementation. So given this heightened focus, how can advisors help investors work toward their goals efficiently and effectively?
The Top Performing U.S. Large Cap ETF
VSL uses a volatility-driven, short-term capital appreciation model. Dom Catrambone explains how that has made VSL the top performing large-cap ETF in 2019 year-to-date.
Capturing the Outsized Returns from Robotics and Artificial Intelligence
It will soon be possible for guests at Marriott hotels in China to bypass lines at the registration desk and check in at a kiosk using facial recognition. Halfway across the globe, Marriott workers are going on strike, seeking higher wages and workplace safety. Artificial intelligence and robotics are at the heart of those highly promising but disruptive innovations. I am speaking today with someone whose index invests in robotics, automation and artificial intelligence companies that are at the heart of those trends.
Investing to Solve the Global Water Crisis
One billion people lack access to safe drinking water, and this number is likely to grow to nearly 3 billion by 2050. To complicate this problem, 60 percent of the world’s population lives in crowded water basins shared by multiple states — many of whom are failing or are at war with one another. There is a lack of fresh water resources to meet water demand. It affects every continent and was listed in 2015 by the World Economic Forum as the largest global risk in terms of potential impact over the next decade. My guest today invests in solutions to this looming global water crisis.
The Biggest Development in ETFs in the Last Decade
I speak with Steve Deroian about the future of the partnership between Dimensional and John Hancock, and explore the reasons behind their fee reductions and the new products coming from this relationship.
GMO’s Approach to ESG Investing
In the U.S., $12 trillion of investments carry an environmental, social and governance – or ESG – mandate. That is nearly a quarter of all professionally managed assets in the U..S. – and the same percentage of global assets have an ESG mandate. Boston-based Grantham Mayo van Otterloo and its chairman, Jeremy Grantham, are among the leading and most outspoken proponents of ESG investing and related issues.
The Role of Private Equity in Wealth Management
- Private equity funding is behind many of the big roll-up firms, including High Tower Advisors, Atria Wealth Solutions, Edelman Financial Services and the Carson Group. Most prominently, PE investments fueled Focus Financial Partners, which went public in July of last year. James Poer, the CEO of Kestra Financial, recently partnered with a private equity investor and discusses the role of private equity in wealth management.
Insights from Leaders of the Top Wealth Management Platform
With consolidation looming in the ETF industry, who will be the likely winners? Will advisors continue to shift allocation to passive products and will ETFs be the primary recipients of those flow? Two industry experts sort out those issues.
The Future of Actively Managed ETFs
ETFs have become a cornerstone of portfolio construction across the advisory industry. Over the last three decades, they have grown from zero to a $4 trillion market. My guest today is Ed Rosenberg, who will help us understand the key trends in the ETF market and what they mean for advisors.
Gundlach: We Are on the Road to a Large Debt Problem
When Donald Trump was campaigning, he said he would eliminate the national debt in eight years. But it has increased by $2 trillion in the first two years of his presidency, leading Jeffrey Gundlach to conclude that we are “on the road to a large debt problem.”
Award-Nominated ETF Firm Offers Defensive and Growth Ideas for 2019
Beginning with their introduction nearly three decades ago, the hallmarks of the ETF structure have been efficiency, transparency and flexibility. That is why ETF sponsors have been able to bring products to the market that target the sectors corresponding to the greatest investor demand, areas like online retail and the battery production to support electric cars. At the forefront of this innovation has been Christian Magoon, the founder and CEO of Amplify Exchange Traded Funds, who I recently interviewed.
The Case for Managed-Risk Strategies
Institutions have been using managed-risk strategies for a long time, and thanks to the ETF vehicle they are now accessible to financial advisors and end investors. Irma Bribiesca, who is the director of ETF strategy and product management for Transamerica Asset Management, has been at the forefront of designing and building those strategies.
The Biggest Innovation in the ETF Industry
One of the great paradoxes of the asset management industry is that its focus is on designing products that grow assets, yet that’s often not what investors need. Investors want a to participate in the market’s upside but be protected from downside losses. I’m going to talk today with two people who are at the forefront of a revolution in ETF product design to support the growth-driven needs of investors.
The Three Trends that Will Drive Investment Returns
Gene Podkaminer oversees one of the largest offerings of multi-asset products in the financial industry. He is a senior vice president in head of multi-asset research strategies at Franklin Templeton. In this interview, he discusses the three trends that will drive investment returns in 2019.
Tweedy, Browne: “Volatility is the Friend of the Value Investor”
The Tweedy, Browne Global Value Fund (TBGVX) has an exceptional track record, outperforming its benchmark and peer-group average by over 300 basis points annually since its inception 25 years ago. I interviewed the members of Tweedy, Browne’s investment committee.
How to Add Value in today's Muni Bond Market
Two of the leading municipal bond asset managers, Invesco and Dimensional Fund Advisors, will present their assessment of the compelling opportunities to add value in the municipal bond market. Attendees will learn key considerations for constructing client muni portfolios and how to address specific client needs. In addition, Advisor Perspectives will present an overview of the results of its recent market research study, which assessed how advisors are choosing municipal bond funds and ETFs.
- How to evaluate municipal bonds in the current rate environment
- What are the critical risk in municipal bond investing
- What is the appropriate client asset allocation for municipal bonds
The Outlook for Fed Policy, China and Brexit
Making sense of the complex global economic environment is essential for advisors, at least for the very important reason of being able to intelligently answer their clients’ questions. Today, the greatest uncertainties are in Fed policy, China and Brexit. We hear from Gene Tannuzzo, whose job it is to make sense of those issues for advisors and their clients.
The Price War in the ETF Industry
Beginning with the launch of SPY over 26 years ago, the ETF industry has dramatically reduced the cost of investing for countless advisors and their clients. I will hear from Sue Thompson of State Street Global Advisors about the competitive pressures in the ETF industry.
She oversees the distribution of the SPDR ETFs, which have over $620 billion in assets. She discussed what State Street is doing to ensure the SPDR product line is priced competitively.
A Top Economist’s Contrarian View on China, Mexico and Trump
You’re wrong if you believe that China will be an economic superpower, Mexico is on the decline, or that President Trump will run for a second term. Pippa Malmgren laid out those contrarian views in a provocative address last week.
Trends in Thematic Investing
A compelling feature that draws investors to ETFs is “thematic investing.” We’ll discuss how it allows investors to target companies that are poised to benefit from structural shifts in technology, people, demographics and infrastructure development.
How Model Portfolios Are Upending Asset Management
According to research from Cerulli, nearly half of advisors use a model portfolio to manage $2.7 trillion in assets. We’ll discuss how those models are permeating all aspects of investment management in the financial advisory industry.
A Close Look at Ibbotson’s Research on FIAs
We did a careful analysis of two fixed-indexed annuities (FIAs) that were the basis of a recent research study by Roger Ibbotson. Our conclusion is that these products are not a bad choice for an investor who is extremely sensitive to loss of capital. But a simpler, do-it-yourself alternative is better.
The Fiduciary Outlook for 2019
2018 may have been the toughest year for investors insofar as federal regulations are concerned. That goes back to when the SEC began reviewing conduct standards in 1995. We’ll look at what changed in the fiduciary landscape in 2018 and the outlook for 2019.
Tyler Cowen: Economic Growth and the Threat to Our Distant Future
The chief goal of society should be to maximize wealth, according to Tyler Cowen. Pursuing that goal has delivered everything from nutritious and abundant food to air conditioning and smartphones in the developed world, and those benefits are spreading rapidly to the developing world. We’ll look at whether Cowen’s single-minded focus on growth make sense and what it means for investors.
What Happened to All the Public Equities?
One of the most remarkable developments in the financial markets over the last 25 years is that the number of publicly traded companies has declined by half. We’ll look at the reasons for that decline and what it means for investors.
Albert Edwards on the problems facing the US, Italy and China
Expect a recession in the next 18 months, said Albert Edwards. Bond yields will converge with those in Germany and will go negative. The economy will be in deflation – or at least face a significant deflationary “scare.” Those factors, he said, will create a terrific opportunity for fixed-income investors.
A special invitation to attend the top investment and behavioral finance conference
We're very pleased to invite you to join us for Portfolio Construction Forum Markets Summit 2019 (February 19) and Finology Summit 2019 (February 20-21), in Sydney, Australia.
Gundlach’s Forecast for 2019
Jeffrey Gundlach said that 2019 will mark the start of a period when bond markets must reckon with the rising federal deficit. In his most passionate comments ever on this topic, he said the exploding national debt and liabilities involving pension funds, state and local government governments and Social Security have reached a stage that is “totally unthinkable.”
Northern Trust: The Six Themes that Will Drive Markets
Bob Browne is an executive vice president and chief investment officer for Northern Trust, which had $1.1 trillion in assets under management as of September 30, 2018. In this interview, he discusses his firm’s capital market outlook and the six themes that will drive investment returns over the next five years.
Southeastern: A Compelling Time to Invest Outside the U.S.
Josh Shores serves as a principal and director of Southeastern Asset Management, Inc. He is a manager of the Longleaf Partners International Fund (LLINX). In this interview, he discusses why the biggest, broadest and deepest opportunity set for investing is outside the U.S.
Gundlach: Long-term Investors Should Allocate to Emerging Markets
It has been a year where virtually every asset class has suffered negative returns. But emerging market equities have outperformed global indices and, according to Jeffrey Gundlach, that’s where investors should put their money “over the next seven and certainly the next 20 years.”