Displaying items by tag: wealth management

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Outsourced chief investment officers got a huge boost from the pandemic, and that trend may be here to stay. According to a study by Cerulli Associates OCIO will grow at a rate of 5% annual for the next 5 years. In the year after the pandemic started the AlphaNasdaq OCIO index grew by 30.69%. OCIO's multi-asset class strategy combines everything from traditional stocks and bonds to sectors like real estate, and this multi asset strategy improves efficiency and tailor risk tolerances. In house investment teams have a harder time competing against OCIO’s in a low rate environment as they can’t seem to identify the returns and lack the connection OCIO’s have.

FINSUM: Specialty skill sets are the predominant employment trend in the 21st century and OCIO brings an expertise that will solidify their part of the financial industry in the years to come.

The next generation of investors want diversity and green investments, but how do they want that delivered?…see the full story on our partner Positivly’s site

(New York)

While yields have been rising over the last few weeks, the reality is that they are still near historic lows, and far below the level most retirees need in order to earn decent income, especially given how risky bonds currently appear. So, in this very difficult environment annuities have emerged as a good option, but how to take best advantage of them when rates are so low? There are a few options, but the best one is “laddering”, or buying multiple annuities over time in order to not commit your entire pot of capital at a time when rates are so low. Additionally, some annuities offer dividend payments on top of regular payouts, which can provide extra income.

FINSUM: One of the big worries right now is putting a big pot of money into annuities, only to see rates and payouts rise in a couple years. Hence laddering is good strategy.

(New York)

WealthManagement.com has run an interesting article about the role of technology in our industry. Authored by Adam Malamed, former COO of Ladenburg Thalmann, the piece discusses how technology should be employed in wealth management, and what has separated successful from unsuccessful technologies. Adam makes the point that while new technologies may be nice in themselves, they are useless unless they fulfil a real market need, which is why so many previously hyped technologies have gone bust (e.g. facial recognition tech for client pitches). Furthermore, the industry itself has been experiencing heavy margin compression, and therefore wealth tech companies need to find ways to simultaneously increase operating margins while also improving client experience. One great example the article makes is Docusign, which made document execution immensely simpler, while also reducing the costs of
processing paperwork. It is a win for clients and for firms.

FINSUM: We couldn’t agree more with this view. Change in our space is by its very nature evolutionary. Clients don’t want to take risks on new tech with capital that took them fifty years to earn, and therefore, many wealth management firms are reticent to adopt “disruptive” new technologies.