FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Social media shapes crisis (The Guardian)
In previous times of economic crisis, European leaders were able to hold negotiations quietly. However, that has changed with the invention of social media. The Guardian says, “The current Greek crisis, by contrast, has played out minute by minute, tweet by tweet, across Twitter, Facebook and newspaper live blogs. Twitter hasn’t merely reflected fast-moving events: it has actively shaped them.” Curious citizens no longer need to wait for a news account of the events unfolding as they can receive minute-by-minute updates of what is happening. According to Sony Kapoor, the director of the international thinktank Re-Define, “It’s made policymaking a lot more difficult.” He continued, “It increases volatility. There can be a crowd mentality. Leaks are easier. But it’s also been a force for democratisation in terms of citizens and actively engaged stakeholders.”
Short sales are on the rise (Bloomberg)
Short sales have upped their bearish bets to the highest levels since the financial crisis. The increase in bearishness comes at a time when the S&P 500 lingers near all-time highs despite the uncertain outcome of Greece’s debt drama and the unprecedented crash in Chinese stocks that wiped away more than 30% of shareholder value in about three weeks. “The danger in shorting a stock, or the market in general, is that it will continue to move up longer than one can stay financially viable,” said Stacey Nutt, chief investment of ClariVest Asset Management, told Bloomberg.
Raymond James won’t develop a robo advisor (Financial Planning)
Take Raymond James off the list of firms joining the robo advisor craze. “We are convinced that not only is advice here to stay, but human-driven advice is here to stay and we can continue to make a big difference in people’s lives,” said Tash Elwyn, president of Raymond James & Associates. Elwyn says the firm is always looking to leverage new technology and remains focused on serving its clients.
SEC fines might be increasing (Think Advisor)
Senators Jack Reed, D-Rhode Island, and Chuck Grassley, R-Iowa introduced the Stronger Enforcement of Civil Penalties Act (SEC Penalties Act) of 2015, which would increase fines related to investor loss. Think Advisor notes current law caps fines at $US160,000 per offence for individuals and $US775,000 for institutions. The bill would up those fines to a cap of $US1 million and $US10 million, respectively, and triple fines for repeat offenders.
Wells Fargo lands a Morgan Stanley veteran (Investment News)
Richard J. Bernstein is leaving Morgan Stanley and taking $US425 million in assets under management with him to Wells Fargo. Bernstein has more than 30 years experience in the industry with his last six coming at Morgan Stanley. According to Investment News’ Advisers on the Move database, Wells Fargo has seen a net increase of $US700 million AUM over the past quarter due to advisor moves while Morgan Stanley has lost $US3.8 billion AUM over that time.
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