FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
The U.S. Is Lagging On The Retirement Front And This Poses An Opportunity For Advisors (Natixis Global Asset Management)
Switzerland tops the 2014 Natixis Global Retirement Index, wresting the spot from Norway. The U.S. trails in the 19th position, unchanged from a year ago. "The responsibility for financial security in retirement is falling even more heavily on individuals than ever before and this trend is likely to continue as government resources in countries around the world become scarcer," according to the report.
This provides advisors with a crucial opportunity and challenge. The report suggests that advisors steer towards investing strategies that center on an investor's goal instead of trying outperform a certain benchmark.
One Advisor Explains Why He Sold His Firm (Advisor Perspectives)
Jim Whiddon sold JWA Financial, his independent registered investment advisor (RIA) in 2012, after thirty years. In an Advisor Perspectives column he explains that this was because it "gave me the opportunity to liquefy and diversify my assets by merging into a larger firm." But he was also concerned about his succession plan. The generational shift coming to the financial industry is huge concern.
So when he did make the decision it was because he realized the landscape for his RIA firm would only get more competitive. It was also because "as a fiduciary, the primary concern was to make sure a partner firm shared our investment and wealth-management philosophy." Finally, Whiddon writes it's because he wanted to bring in other areas of expertise like tax planning.
Investors Shouldn't Ignore Today's Value Opportunities (The AllianceBernstein Blog)
"In the aftermath of last year’s market party, the most expensive quintile of global stocks now trades at 8.1 times book value, or almost four times higher than the global stock market as a whole—the second-highest premium since 1971," writes Chris Marx, senior portfolio manager at AllianceBernstein. "Meanwhile, the cheapest quintile sells at 0.9 times book value, a 57% discount to the market and around its historical average in both absolute and relative terms."
We last saw such a difference between the two groups in the lets 90s. But even after the tech bubble burst, value stocks came out on top. "Indeed, our research is uncovering widespread value opportunities, with lingering anxieties pushing cheap stocks to some of their deepest discounts versus pricey stocks in more than 40 years—across all sectors of the market," Marx writes.
"Though it may take time for others to come around, we think the potential in wallflower value stocks today makes it well worth taking the chance to ask them for a dance."
A Full Round-Up Of Wall Street's Targets For The S&P 500 (Mebane Faber Research)
After the S&P closed at 1,848 and returned over 30% last year, many are wondering which direction it's headed. Here's a table of all of Wall Street's year-end S&P 500 targets.
How Advisors Can Prepare For Teacher Clients (The Wall Street Journal)
Dave Grant writes in a new WSJ column that he left a firm with $250 in assets under management (AUM), to found a boutique firm called Finance for Teachers. This followed on concerns stemming within his own family that has a few educators that were worried about their finances as states began to cut pensions and benefits to employees.
Advisors need to keep a few things in mind if they're about to approach teachers or have teachers approach them. "Advisers need to be prepared to provide a lot of education, without any jargon, to develop a level of trust with these clients," Grant writes. "Once advisers earn that trust, then they need to help prepare their teachers clients for their new retirement reality. Most of my clients are over the age of 50 and have done no planning; they have to start saving immediately to account for these changes."
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