FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Alternative investing education is growing in popularity (Investment News)
Investment Management Consultants Association and the Chartered Alternative Investment Analyst Association have teamed up to offer online courses covering the basics of alternative investments. Over the past year, more than 1,000 advisors have taken part in their Fundamentals in Alternative Investments Certificate program, which according to Jill Guess, director of research at Prism Advisory Group, “covers the major alternative asset classes and strategies without going as deep into the weeds mathematically as the CAIA program.” The self-directed program covers 21 different modules and must be completed in an 11-month period.
US credit conditions are at recessionary levels (Advisor Perspectives)
The Credit Managers Index has seen notable weakness at the start of 2015, and is now at levels last seen in 2008. The report says, “The rejections of credit applications fell out of the 50s with a resounding thud — going from 50.3 to 43.8. There is most definitely a credit crunch underway and it is now easy to determine what the prime factor is. There are many companies seeking credit that are too weak and there is obviously an abundance of caution showing up in those that issue that credit.” Alexander Giryavets of Dynamika Capital notes, “The speed of deterioration is shocking.”
How high income clients should handle large student debt burdens (Financial Planning)
Graduates with a degree in higher education often receive six figure incomes, but are also burdened with large amounts of student loan debt. Stacy Gallagher Ployhar, a planner at 2020 Financial Planning in Seattle, notes, “A common theme is that they are graduating, then getting married, then want to buy a home six months later and start a family within the year.” She continued, “They also need to start saving for retirement, and they are at an age where they can’t do these things sequentially.” First, clients should figure out exactly how much debt they are carrying. Next, decide on a repayment plan that works best based on their financial needs.
Target-date fund investors are likely to be disappointed (Financial Advisor)
Target-date funds have garnered attention in recent years, and are now nearing the $US1 trillion threshold for assets under management. Financial Advisor says, “Research Affiliates estimates that U.S. stocks’ real return over the next 10 years will be just 1 per cent, and the aggregate U.S. bond index will return nothing.” So what should investors do? Robert Arnott, chairman of Research Affiliates, says look to diversify into inflation assets when they are at reduced prices, like the present time.
UBS is offering bigger retirement payouts to advisors (Wall Street Journal)
The Wall Street Journal reports UBS’ US wealth management unit “started rolling out a program that offers its nearly 7,000 brokers a sweetened deal where those looking to retire can receive a payout more than double their annual production if they choose to hand their clients over to another UBS adviser at the end of their career.” The announcement comes amid increased competition in the space that has seen firms poach top-talent from their competitors. UBS is implementing the strategy in an effort to keep utlra-high-net-worth clients from taking their money elsewhere.
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