It's A Mistake For Advisors To Blame Any Single Asset Class

wolf of wallst

FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors. For more visit Business Insider’s new Wealth Advisor vertical.

Advisors Shouldn’t Single Out One Asset Class For Abuse (The Capital Spectator)

Consensus is that emerging market growth is now slowing and that the good times in emerging market stocks are now over. But James Picerno at Capital Spectator writes that, “The truth is that we didn’t wake up today and find that what had been an extraordinary investment opportunity last night had suddenly become dirt. The real story is that as the world has become increasingly globalized, and markets have become ever more securitized, expected return for the long run generally has inched down. This is almost certainly true for emerging market stocks, but it’s no less relevant for the rest of the planet’s equities (and bonds, real estate and commodities). …The low hanging fruit of return has been picked.”

He also points out that expected returns are in “flux” in shorter periods and “diversification benefits will fade through time.” “Over longer stretches, however, it’s going to be tough to escape the terminal slide. In a world crawling with institutions armed to the teeth with computer-based quantitative strategies, searching through every nook and crevice of markets, the long, slow descent of risk premia will yield to financial gravity. That said, it’s a mistake to focus on one piece of the major asset classes and single it out for abuse.”

One Advisor Shows How Social Security Benefits Could Pay For College (The Wall Street Journal)

Minor children of Social Security beneficiaries can receive as much as 50% of their payment, according to Fred Cornelius of Maryland-based Burt Wealth Advisors. Cornelius told The Wall Street Journal that one client in his 70s that earned about $250,000 and decided to adopt three young children with his new wife. Since they didn’t need the extra money for their daily expenses, they invested the children’s social security benefits in 529-college savings plans. “This client may not be alive by the time the children go to college and this allows them to set aside money for that purpose,” Cornelius told the WSJ.

Raymond James Launches New Tool To Help Advisors Build Custom Portfolios (Investment News)

Raymond James is launching a new service called the Portfolio Management centre (PMC) to help advisors customise portfolios on the firm’s platform. “Just about every adviser takes a different approach from the adviser down the hall,” Josh Bohlander at Raymond James told Investment New. “If they want to use the firm’s models, they can. If they want to use their own models, they can do that too.”

10 People Who Will Have The Biggest Impact On The Wealth Management Industry In 2014 (, REP)

REP is out with its annual list of 10 people to watch in 2014. The 10 picked this year are ones they expect to be “household names” in wealth management soon. We picked three and highlighted REP’s reason for choosing them.

1. Deborah Fuhr, partner and co-founder of ETFGI. REP picks her as someone who can traverse the vast world of ETFs, identifying the “winners from the landmines.” She previously spent three years as global head of ETF research at BlackRock. 2. Craig Pfeiffer, CEO of Advisors Ahead. The average age of advisors was 49 in 2012, according to Cerulli Associates and there’s been a lot of chatter about ways to draw in new talent. “That’s the dilemma Craig Pfeiffer is trying to solve. Being on the inside at Morgan Stanley for 29 years, Pfeiffer realised that traditional broker training programs—with their low success rates—weren’t cutting it,” according to REP. 3. Janet Yellen, vice chairman of Fed Board of Governors. REP has nominated her because she is one of the top contenders for the chairman of the Fed.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.