Wealth Management

(New York)

Any way you slice it, 2021 seems like it will be a good year for munis, and not because the financial condition of municipalities is so great (it isn’t!). One of the main reasons why is the incoming administration and Congress. Between Biden’s stimulus plans and the now Democrat-controlled Senate, the odds for large amounts of local and state financial support from the federal government are quite high. This part of equation is well understood, but there is a second aspect of the Democrats’ plans that will also be beneficial to munis: they plan to raise taxes on the wealthy. Higher taxes on the wealthy would directly increase demand for munis bonds, which means they should have a tailwind this year.


FINSUM: The part about increased taxes and how it drives muni demand has not been discussed enough. We think this is an excellent angle and combined with financial stimulus, should set up a couple years of smooth sailing.

(New York)

Here is a non-sensical but fully logical sentence for you: bonds just aren’t “bonds” right now. What we mean is that bonds simply aren’t fulfilling their long-understood role any longer. They yield very little and have a great deal of risk—both the opposite of their traditional role. So where can advisors turn? One increasingly interesting area is annuities, and fixed index annuities in particular. They offer the downside protection investors need, and upside participation everyone wants. Principal is never put at risk to the market, but interest from the initial purchase is used to participate in upside. In other words, you have principal protection with some upside potential—just like bonds have traditionally been used.


FINSUM: Fixed index annuities seem to be a very good alternative to bonds in the current environment.

(New York)

There are so many things for a broker to consider before going independent. Aside from all the main ones that are usually discussed—compensation, freedom with clients etc—another key concern is branding. Many brokers have trouble leaving the big name on their business card behind when changing firms. Even advisors who are already at RIAs have a big choice to make in changing their branding. All of this highlights a key point: branding and marketing matter a great deal when going independent, and the support the new RIA provides is critical. Essentially, an important question to ask your potential new RIA is what kind of branding and marketing support they provide to help you transition existing clients, but also acquire new ones.


FINSUM: Marketing and branding are crucial areas where RIAs can vary wildly. Those with strong offerings will empower advisors to acquire new clients and grow AUM, where weak offerings can lead to client attrition and few new opportunities.

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