FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Millennials account for 30% of new vehicle sales (The Atlantic)
Millennials were not buying many cars during the financial crisis, but the improving economy has sparked renewed interest in their need for speed. According to data from J.D. Power & Associates millennials bought close to 1.7 million cars in 2010, and that number has surged to approximately 3.7 million in 2014. The buying spree has increased millennials’ market share from 17% of the industry to almost 30%. So what makes are they most interested in buying? An AutoTrader.com survey says Honda is the most preferred choice, followed by Chevrolet, Toyota and Ford.
Most people on Wall Street believe the Federal Reserve will raise interest rates by the end of the year. So what will the impact be on the US Treasury market? Deutsche Bank AG economists Joseph LaVorgna and Brett Ryan looked at previous Fed rate hike cycles and concluded, “If history is a guide, a backup in Treasury yields could be both swift and violent, with most of the move occurring over a short period of time, generally within two months.” The team points to 2004, the last rate-hike cycle, as an outlier, when the 10-year yield was little changed despite the Fed raising rates.
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Money is pouring into ETFs, but the retail investor is still avoiding the space (Financial Advisor)
Money continues to flow into exchange traded funds, but without the participation of the retail investor. According to Black Rock, the ETF universe has grown from zero to $US3 trillion over the past two decades, and it’s expected to become a $US4 trillion industry within two years. Interestingly, only one-fifth of retail advisors are using the investment vehicle, and that has left some insiders puzzled. Why is the retail investor staying away? Many still do not know understand what an ETF is. “People feel all warm and fuzzy in a mutual fund as a structure. It sounds safe and comfortable. Changing the behaviours of people to buy something that is a more efficient way to invest is a long-term journey,” noted Mark Wiedman, global head of iShares at Black Rock.
Raymond James is ramping up social media use by advisors (Think Advisor)
Raymond James is making a push to get all of its financial advisors using social media. The company has already seen two-thirds of its advisors make a presence for themselves on Twitter, Facebook and LinkedIn, and hopes to have the remaining third up and running soon. A social media presence will allow advisors to develop their networks while creating brand awareness. Randy Carver, an advisor from Mentor, Ohio says, “It’s cool and it’s cheap. It’s a branding tool.”
Wells Fargo lands a team from Morgan Stanley (Financial Planning)
Three Morgan Stanley advisors have left the firm for Wells Fargo, bringing $US244 million in assets under management with them. The trio consisting of brothers Mitchell and Christopher Rask and Jane Miller will now operate as North Point Wealth Advisors under the Wells Fargo umbrella. That was not the only team Morgan Stanley lost. Financial Planning notes the trio of Richard Bondi, Jr., Eric Gregory and Brian Friday left with their $US260 million in assets under management to join RBC.
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