FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisers.
Cyberattacks On The Finance Industry Have Doubled This Year (Financial Adviser Magazine)
“Cyber assaults against the financial services companies nearly doubled this year, according to a report issued Monday by PwC,” reports Ted Knutson. “Twenty per cent of companies surveyed said they had a cyber breach by a competitor in 2014, compared to 11 per cent in 2013.”
It’s not only competitors that are trying to hack financial services companies — 44% of companies reported that an employee attempted to breach the system, up from 33%, and 28% of companies were cyber-assaulted by an ex-employee, up from 23%.
There is some good news: Cyber assaults by outsiders have declined and are down to 26% from last year’s 36%.
Europe Isn’t A Complete Graveyard Yet (Advisor Perspectives)
The European economy has struggled recently: Emerging markets have slowed, the crisis in Ukraine has escalated, and there are never-ending cyclical and structure problems. However, that doesn’t mean that investors should look away.
Because Europe is primarily export-driven, the region should benefit from a lower euro. Plus, “better-than-expected US growth” should contribute to the European economy, according to Heather Arnold.
“We are finding potential opportunity across the board in Europe, but most notably in the energy sector given recent weakness there. Despite their recovery to date, financials are still lowly priced and continue to offer recovery potential, in our view. We also believe select pharmaceutical and health care stocks have a leg of growth ahead of them that we think is not reflect in current valuations,” writes Arnold.
Investors Have Calmed Down After October (Investment News)
“October delivered on two historical points for which the month is renowned: a dramatic selloff and a pivotal rebound,” writes Gene Peroni. “The short-lived sell offs in them major stock market indexes earlier this year proved to be springboards for short-term rebounds to record high levels.”
Investors have calmed down after the slingshot rebound, because it eliminated fears of a major pullback. Additionally, following better-than-expected earnings in Q3, investors believe that there is still room for significant growth.
“I maintain that my revised year-end target of 18,500 could be attainable. As for my longer term, my bullish refrain ‘the best is yet to come,’ applies,” writes Peroni.
Morgan Stanley Advisers Will See Up To 15% Of Their Bonuses Deferred (The Wall Street Journal)
Morgan Stanley financial advisers will now have to wait to receive between 1.5% and 15.5% of their cash and stock bonuses. “For 2015, the bank’s wealth-management division is tweaking its pay scheme so that a slightly bigger portion of adviser compensation will be deferred, although a bulk of it still will be paid out immediately, according to one person with knowledge of the matter,” reports Michael Wursthorn.
Morgan Stanley considers this change “simpler and more transparent,” although one adviser stated that this made him feel “handcuffed.”
“It won’t make [advisers] not come and it won’t drive people out. But for somebody looking to go, could this be something that breaks the camel’s back? It may,” said Mindy Diamond.
Steve Cohen Goes Big Into Schorsch’s RCAP (Wealth Management)
Steve Cohen has increased his stake Nicholas Schorsch’s RCAP up to 3.4 million shares, up from 548,000, according to Diana Britton. The timing is extremely interesting as ARCP (RCAP’s sister company, also owned by Schorsch) recently announced a $US23 million accounting error. Many broker/dealers have suspended sales of ARCP products in light of the error.
“Of the 31 investment products that RCAP distributes through its wholesale broker/dealer, 14 of them are affiliated with American Realty,” reports Britton.
Cohen’s hedge fund, SAC Capital, was indicted for securities fraud in 2013. His firm was renamed Point72 Asset Manager after the indictment, and he transitioned the firm into a family office.
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