Displaying items by tag: wealth management

Friday, 20 March 2020 09:59

The Best Age to Buy a Fixed Annuity

(New York)

One of the most commonly asked client questions about annuities is “what is the best age to buy one?” The answer, as advisors know, is that there isn’t one; it depends on your financial goals and circumstances. That said, there are a couple things to bear in mind. Firstly, those in their mid-40s or younger should almost certainly not consider annuities (outside of some variable annuities) because they have the time to take additional risk (and get the additional growth) of direct exposure to the market. On the other end, annuity availability for those 80 and older declines rapidly. Accordingly, depending on circumstances, the sweet spot is likely in that range.


FINSUM: Annuities seem to be best bought for what they guarantee, not what they might offer, as downside protection and income protection are truly the name of the game.

Published in Wealth Management
Friday, 07 February 2020 09:58

LPL Debuts the Employee Broker Model

(New York)

LPL, the largest independent broker-dealer out there, is debuting what seems a curious new model to some. It is making some brokers employees of the firm, completely breaking the mold of the entrepreneurial independent broker running his own office. The firm says it is trying to offer as many good options as it can to make recruits happy and excited about joining LPL. Employees will get a lower payout but better overall benefits. LPL may start to offer attractive bonuses to recruit brokers who want to be/stay employees.


FINSUM: This makes perfect sense to us from a recruiting perspective. There are likely plenty of brokers out there who like their job job but want more stability. This seems like a good compromise.

Published in Wealth Management

(New York)

Morgan Stanley’s earnings this week were an absolute blow out for the Street. The bank beat all expectations and performed exceptionally well. For us, the earnings really feel like a salute to the whole wealth management industry, as it was Morgan Stanley’s pivot to focus more on that business that has made it the reliable earnings machine that it has become. Revenue from wealth management accounted for around 40% of the whole bank’s revenues, and was up 11% on the year.


FINSUM: Wealth management is a rock solid and capital light business, and MS’ earnings are a testament to that. Gorman’s choice to focus on this segment of their business a few years ago was a very smart one.

Published in Eq: Financials

(Los Angeles)

Regulators might be about to really shake up the all important annuities market. The National Association of Insurance Commissioners, which is comprised of state level regulators, has just proposed a new suitability standard for annuities transactions. The new rule would require insurance brokers to act in the best interest of clients when recommending products. The specific wording used says that the insurance salesperson must act “without placing the producer’s or the insurer’s financial interest ahead of the consumer’s interest” and that they must “without placing the producer’s or the insurer’s financial interest ahead of the consumer’s interest”. Speaking about the rule, the NAIC says “It’s in harmony with what the SEC did but goes a little further in providing clarity as to what the conduct standard actually is”.


FINSUM: The annuities market has had some bad behavior so a clean up to give peace of mind to all involved is warranted, but this will likely mean big changes if it comes to pass.

Published in Wealth Management
Thursday, 02 January 2020 10:45

JP Morgan May Be Ready to Surge

(New York)

JP Morgan finished 2019 on a bang and was a great stock all year. It rose by a market-beating 42% over the course of the year despite worries over the economy and declining interest rates. This has led some to think the bank’s stock is overpriced, but many, like RBC believe it will continue to rise. The bank has what is considered a “fortress” balance sheet and it has done a great job diversifying its revenue streams so that its earnings are smoother. Jamie Dimon has no plans to retire.


FINSUM: Aside from its well balanced revenue streams (47% from consumer and community banking, 31% from its corporate and investment bank), the bank is also making a bigger push into wealth management, which could start helping the stock.

Published in Eq: Financials
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