FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Retirement account balances declined amid the market’s volatility (Fidelity)
Fidelity’s third quarter retirement analysis found the average retirement account balance fell 7% from the second quarter to $US84,400. The data also marked a more than 5% drop on a year-over-year basis. The decline caused a record number of people to reach out for help in the quarter with Fidelity receiving more than 16 million online inquiries alone between August 23 and August 29. Despite the market’s volatility, the majority of investors didn’t make any changes to their retirement accounts, Fidelity says.
The October jobs report crushed estimates (Business Insider)
The US economy added 271,000 jobs in October, surging past the 185,00 print the Bloomberg consensus was expecting. The unemployment rate slipped to 5.0%, matching estimates. In addition, average hourly earnings jumped 2.5% on a year-over-year basis. Some market participants believe a strong report could tip the scale in favour of an interest-rate hike at the Federal Reserve’s December meeting. The market is now pricing in a 70% probability of a rate hike before the end of the year, up from 56% before the report.
The details of Square’s IPO are out (Business Insider)
The mobile-payments company says its initial public offering will price in the $US11 to $US13 per share range, and is expected to raise $US403.7 million. CEO Jack Dorsey will retain 23.6% of the voting power. Square will trade under the ticker SQ.
Robo assets are expected to surge over the next five years (Think Advisor)
Research firm Cerulli Associates says robo advisors are going to see assets jump by 2,500% over the next five years. According to Think Advisor, Cerulli Associates believe it’s not just robo-only and large retail firms that will be the winners, but also retail advisors and traditional advisory firms. “We anticipate that most, if not all, retail direct firms will have a digital advice offering within the next three years, and traditional advisors will also launch digital offering for lower-balance investor accounts,” Tom O’Shea, associate director at Cerulli, said in a press release. Cerulli’s research also found millennials are more likely to go robo than Gen Xers and baby boomers.
Financial Engines is buying The Mutual Fund Store (Wealth Management)
Wealth Management reports, Financial Engines, who some consider the original robo advisor, is buying The Mutual Fund Store for $US560 million in cash and stock. A statement released by Financial Engines says the company plans to leverage The Mutual Fund Store’s planning services and advisor network into its online 401(k) platform. The acquisition, which will be accretive to Financial Engines’ full-year 2016 earnings, will give private equity firm Warburg Pincus a 12.5% stake in Financial Engines as part of the deal, making it the largest shareholder.
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