Displaying items by tag: advisors

For Investment Week, Sarang Kulkarni, the Lead Portfolio Manager of the Vanguard Global Credit Bond Fund, shared some thoughts about active fixed income and the current state of markets. Overall, his goal is to identify and invest in the best credit opportunities to generate consistent, risk-adjusted returns over the long-term. He is agnostic in terms of geography, sector, duration, credit quality. Instead, the fund has a bottom-up approach with a bias towards value. 

Recently, the fund has been investing in European financials due to favorable valuations and an improving regulatory environment. Additionally, it sees improving credit trends in the consumer discretionary sector and believes there’s upside in the bonds of companies in this sector. 

In terms of its edge over other active managers, Kulkarni believes that other funds rely on betting on the direction of the bond market to ‘generate alpha’. Over the long-term, these strategies tend to underperform the benchmarks and can perform poorly in more volatile environments. 

In contrast, Vanguard seeks to generate alpha over an entire market cycle in a transparent way. It avoids beta even at the expense of short-term returns. The fund also seeks to replicate the risk-return profile of the asset class which is key to consistent, long-term performance.

Finsum: Sarang Kulkarni, the Lead Portfolio Manager of the Vanguard Global Credit Fund, shares some thoughts on active fixed income and what makes his fund unique relative to its competitors. 

The landscape for financial advisors has shifted rapidly over the last decades. And, these shifts are only accelerating in terms of frequency and impact. Thus, advisors also need to update their strategy and approach to thrive in this new environment.

A major change is that advisors have to work harder to get and keep clients, especially given that many other money managers are likely competing for clients' resources, time, and attention as well. 

For Financial Planning, John Guthery discusses why advisors should start embracing model portfolios to align their business with this new environment. Increasingly, the most value that an advisor brings is through quality time spent communicating with their clients to understand their needs and plan appropriately. This is true for both parties. 

Too many advisors are spending too much time managing portfolios and researching investment ideas, when they could instead be focused on tasks that will actually grow their business. Most long-term research shows that advisors fail to beat the market over long periods of time.

With model portfolios, this function is effectively outsourced so that advisors can spend more time on the tasks that actually move the needle in terms of building and operating a thriving practice. 

Finsum: Financial advisors tend to feel like they are not spending enough time with clients. Model portfolios are one solution as it frees up time for advisors.

Active fixed income ETFs are seeing strong inflows and a slew of new launches to capitalize on its increasing popularity. Some major drivers of demand are growing awareness and comfort from advisors and institutions, elevated yields, and outperformance on longer timeframes.

In addition to these secular drivers of demand, the asset class is benefitting from the current uncertainty around the economy and Fed policy. Active managers have more discretion in terms of duration and quality when selecting securities. This creates more alpha especially in a sideways market. 

The latest entrant in the active fixed income ETF space is Madison Investments which just launched the Madison Aggregate Bond ETF which invests in all types of bonds to generate superior long-term risk-adjusted performance. It believes that the fund will have lower risk than benchmarks in addition to income through risk-conscious investing. 

The ETF has an expense ratio of 0.40% and marks its third ETF launch and first fixed income ETF. It will be co-managed by Mike Sanders, the Head of Fixed Income, and Allen Olson, Portfolio Manager. The fund will hold between 100 and 500 securities with up to 10% in non-investment grade credit. Currently, it has an average duration of 6.3 years.

Finsum: Madison Investments launched the Madison Aggregate Bond ETF which is an active ETF that aims to have lower risk than benchmarks. 

There’s a war for talent in the financial advisor space. It can certainly be challenging for practices that are looking to expand, but here are some tips to increase your chances of success from SmartAsset’s Rebecca Lake, CEFP.

The first focus should be on understanding your goals in order to help you evaluate candidates and make the best decision. Try to think about what key responsibilities will the new hire handle, and how will he or she be integrated into the firm. 

Next, it’s important to consider your company’s culture and assess candidate’s personalities to determine whether they would be a good fit. Then, Lake recommends creating an ideal candidate profile which can include an overview of their skills, experience, personality, and values. This will help you decide if the candidate would be accretive to thecompany’s culture. 

The next step is to invert the process and think about what a prospective candidate sees when looking at your company. These include compensation, work setup, flexibility, vacation policy, parental leave benefits, education opportunities, career training, etc. 

Once these steps are complete, it’s time to start investigating various recruitment channels. Often, the best strategy is to start with your network and professional colleagues as this can yield the best talent in the least amount of time with minimal cost. If that fails, then the other paths can be pursued. 

Finsum: For financial advisor practices that are dealing with a surge of growth, here are some tips on hiring and recruiting new advisors.

What’s good for the goose is good for….financial advisors?

On one hand, they adroitly help clients navigate their future, but when it comes to their firms, well, they might not be quite so vigilant, according to smartasset.com.

Only 27% of financial advisors have a succession plan – or formal preparations to segue from the business -- at all, according to a 2018 report from the Financial Planning Association.

Consequently, it begs the question: with a gaggle of advisors closing in on hanging it up, what’s their legacy strategy?

Among key findings from financial advisors on SmartAsset’s platform:

The number of financial advisors with a succession plan has increased.

Most financial advisors without a succession plan intend on creating one at some point in the future

Financial advisor succession planning is not top-of-mind for most individuals.

Meantime, probably not surprisingly, women, it seems, are making a major mark in the financial terrain.

The essential role of women agents in furthering the cause of financial inclusion and fostering business growth for financial service providers was confirmed through a plethora of research studies done worldwide, according to findevgateway.org.

What’s more, female agents are the ones of choice among female customers, while agents serving more women customers derive more income and satisfaction on the job.