FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
American’s 401(k) plans are becoming more balanced (Bloomberg)
When it comes to retirement, Americans are taking fewer unnecessary risks. Americans continue to diversify their retirement accounts with the per cent of those holding at least 20% of employer stock down to 8% from 18% ten years ago. The number of retirement accounts holding at least 90% equities has also fallen sharply. Ten years ago that number was at 23%, now only 13% of accounts fall into that category, according to data provided by Vanguard. One area where investors have learned to take more risk is avoiding retirement accounts with no stock holdings. The percentage of retirement accounts that fall into that category is down to 5% from 13% in 2005.
Saudi Arabia opens its stock market to the world (Business Insider)
Foreign investors can finally trade Saudi Arabian stocks. However, retail investors will still be held out of the game as access has only been granted to institutions with assets under management (AUM) of at least 18.75 billion Saudi riyals ($US5 billion, £3.22 billion). Saudi Arabia’s stock market edged up 0.3% on the news, and is higher by 16% so far in 2015.
Robo advisors are gaining ground (Wealth Management)
Robo advisors are set for their biggest haul yet as more high net worth individuals seek lower transaction costs. Nick Hungerford, the co-founder and CEO of British start-up Nutmeg, told Wealth Management, “I don’t need to destroy one of them, I can just take 10 per cent business off all of them,” referring to the traditional wealth management industry. An increasing amount of investors are preferring the low cost and transparency provided by robo advisors. A report from Goldman Sachs suggests $US4.7 trillion in revenue could up for grabs.
The SEC is accepting public comments on ETPs (Financial Advisor)
The Securities and Exchange Commission is accepting public comments on the role investment advisors should play in the sale of exchange traded products. According to SEC Chair Mary Jo White, “As new products are developed and their complexity grows, it is critical that we have broad public input to inform our evaluation of how they should be listed, traded and marketed to investors, especially retail investors.” The products made up 25.7% of US equity trading dollar volume in 2014, according to data obtained by Financial Advisor.
Schwab, TD Ameritrade are seeing tremendous asset growth (Think Advisor)
Charles Schwab and TD Ameritrade saw a big jump in total assets. Schwab saw its asset base rise 9% from a year ago to $US2.57 trillion. Meanwhile, TD Ameritrade announced its total assets climbed 12% to $US710.8 billion.
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