FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
LPL Blames Recruitment Slowdown On Weather And Stock Market Volatility (Investment News)
The severe cold that slammed the U.S. this winter has trickled through in the economic data. Now, LPL Financial is blaming a slowdown in recruitment on the cold as well, reports Bruce Kelly at Investment News. LPL also attributed part of the slowdown to stock market volatility. This is because at times of volatility advisors tend to strap in and settle down to take care of their clients. Kelly writes that “is closely watched by the rest of the independent broker-dealer industry and is considered a bellwether for the business.”
Merrill Lynch Advisors Worry About Changes After Veteran Managers Quietly Retire (The Wall Street Journal)
Bank of America’s advisors are worried that they will face more pressure to change the way they conduct their business, “more than a dozen veteran Merrill Lynch managers have quietly retired, resigned or been reassigned in recent weeks,” report Corrie Driebusch and Matthias Rieker at the Wall Street Journal. A spokesperson told the WSJ that this is normal for this time of the year, but a Merrill Lynch advisor on condition of anonymity said, “this is the old guard, good managers, suddenly leaving.”
The One Big Story No One Is Talking About Right Now (Business Insider)
John Stoltzfus, chief market strategist at Oppenheimer, thinks no one is talking about how unprepared baby boomers are for retirement. “No one wants to talk about just how unprepared the Baby Boomer generation is for the years when they will no longer be able to work,” he told Business Insider’s Steve Perlberg. Investment and Insurance firms certainly provide informational commercials as background in the media on this but it does not appear that Washington or the folks on Main Street are considering the unpreparedness as the potential for crisis that it may be.”
Here’s Where We Are In The Business Cycle (Fidelity)
2014 has got off to a rocky start. There’s the severe weather impacting the U.S., emerging markets have taken a hit, concerns about Chinese growth have resurfaced, and geo-political tensions between Russia and Ukraine are in th headlines. Fidelity has put up a chart of where some of the world’s biggest economies are in the business cycle.
Investors have been rattled by events in global markets. First is was the blow to emerging market currencies, then the anti-government protests in Venezuela and Russia’s actions in Crimea. Vanguard writes that at times like this it is important for advisors to step in and help clients understand these headlines and “create an investment plan aimed at achieving goals and stick with it.”
From Vanguard: “A number of Vanguard funds hold assets based in Russia as part of diversified portfolios, with the percentage of assets in these funds ranging from 0.1% in our Total International Bond Index Fund to 13.7% in our Emerging Markets Government Bond Index Fund. (Data are as of January 31, 2014.) Such diversification offers some protection against the volatility of any one region and is in accordance with the funds’ stated policies of seeking to track the performance of specific benchmarks that include those same Russia-based securities.
“Nick Eisinger, an investment analyst in Vanguard’s London office, said the Ukraine situation could result in a downgrading of the country’s debt to junk status and continued flight of capital. The conflict also increases the likelihood of Ukrainian default and adds to pressure on emerging markets securities, he said. …But those are the details. As an advisor, you can help clients see that they shouldn’t let those details push them off course.”
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