FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Six Reasons Advisors Charge Less Than They Should (Advisor Perspectives)
Advisors are not charging as much as they should according to Bob Veres of Inside Information. He says there are six signs that advisors are charging less than they should. 1. “There is no visible relationship between advisory fees charged and the amount or quality of work that a client receives for them.” 2. There is no consensus on whether planning fees should be separated from asset management fees. 3. “There is no professional consensus on what the asset management service is worth.’ 4. While advisors are said to charge 1% of clients AUM there is little consistency in the industry. 5. “The upfront fees are inconsistent.” 6. There is no consensus on a “retainer fee structure.”
This Stock Market’s Ultimate Upside Potential Could Be Legendary (Investment News)
Eugene E. Peroni Jr. of Advisors Asset Management says, “the 2002 market bottom packed powerful technical credentials that I believe could make the market’s ultimate upside potential in this cycle legendary.”
Peroni writes that this is because of four key reasons. 1. There has been “self-policing of price and sentiment excesses.” 2. “Broad and diverse sector leadership has prevailed in this cycle.” 3. The Fed’s communication policy has meant that markets will get notice about an increase in rates. 4. “There remains a distinct disconnect between a rising stock market since March 2009 and the public’s cautious view of growth stocks.”
There Are Just 5 Things You Need To Know About Investing (The Motley Fool)
The are just five things you need to know about investing, according to Morgan Housel at The Motley Fool. 1. “Compound interest is what will make you rich. And it takes time.” 2. “The single largest variable that affects returns is valuations — and you have no idea what they’ll do.” 3. “Simple is usually better than smart.” 4. “The odds of the stock market experiencing high volatility are 100%.” 5. “The industry is dominated by cranks, charlatans, and salesman.”
The European Stock Market Is Not Europe (Morgan Stanley)
Just like a large portion of the S&P 500 revenue is derived from outside the U.S. economy, a large portion of European companies’ revenue is also derived from outside developed Europe.
A 7-Point Response To Buffett Haters (The Reformed Broker)
Over the weekend Cullen Roche wrote a seven-point takedown of Warren Buffett. Josh Brown, an “unabashed fan” of Buffett offered up a defence to Roche’s criticisms. Here’s an excerpt of what went down.
1. Roche argued that Buffett was critical of hedge funds but spent the first 10 years of his career running one. Brown argued that Buffett eventually found a “better vehicle to align his interests with those of his shareholders and the types of long-term investments he wanted to make. …Why is learning and evolving one’s business a negative?” 2. Roche criticised Buffett for telling the world that fixed income is dangerous while holding billion dollar positions in bonds. Brown wrote, “When you run insurance businesses, energy utilities and over 50 private companies with ongoing expense and cash flow obligations, using fixed income to meet the periodic costs involved isn’t an option – it is a requirement.”