FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Merrill Lynch managed to keep a “strong grip” on its clients (InvestmentNews)
Merrill Lynch retained 40-50% of client assets tied to advisors who left last year for other firms, reports Christine Idzelis. By comparison, firms usually retain 23% of assets when advisors move from one wirehouse or a regional broker-dealer to another.
Merrill’s ability to retain client assets is unusual in the aftermath of the financial crisis. Danny Sarch, president of wealth management recruiting firm Leitner Sarch Consultants, told InvestmentNews that the crisis made people “suspicious of big institutions” while “the experienced adviser is a constant in a turbulent industry.”
RIA mergers saw a record year in 2015 (FA Magazine)
Consulting firm DeVoe & Company reported that the investment advisory industry saw an whopping 123 merger and acquisition deals in 2015, up 37% from the previous record set in 2014.
“The increased velocity in M&A activity has been driven in part by a broad mix of acquirers among RIA firms themselves, consolidators, private equity firms and even banks that are looking for opportunities in a fragmented industry,” reports Jeff Schlegel. “In addition, the graying of the RIA industry’s founding generation means there are a lot of financial advisors approaching retirement and interested in cashing out.”
China’s second- and third-tier cities are looking pretty good (Advisor Perspectives)
“Reflecting on our recent trip to some of the so-called second- and third-tier cities in China gave us the impression that the service sector (including tourist and culture-related industries) is strong and likely to continue growing,” wrote Mark Mobius of Franklin Templeton Investments.
“Although we did notice that infrastructure and property investment had slowed down due to more stringent approval process and still-high property inventory, we believe that this could improve gradually in 2016 as financing to local governments has improved,” he added.
Here’s how to play the low-yield world (Charles Schwab)
Treasury bond yields fell in the months since the Fed hiked rates in December. And yields on riskier bonds shot up after concerns about the creditworthiness of borrowers in a slow-growing global economy and with tighter financial conditions.
In this environment, “we believe investors should focus on intermediate-term, investment-grade bonds for the bulk of their fixed income portfolios and limit exposure to riskier sectors until the risk/reward outlook improves,” writes Kathy A. Jones.
Wells Fargo Advisors picked up Geoffrey “Case” Gatlin, who manages $169 million in client assets, from Raymond James, and Thomas Braley, who managed $95 million in client assets, from Bank of America, reports Marlene Y. Satter.
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