Wealth Management
LPL Financial recently announced that it has appointed Garrett Fish as Senior Vice President and head of Model Portfolio Management to the firm’s investment research team. In this new role, Fish will lead LPL’s investment model portfolio function, leveraging his years of active portfolio management experience to guide the firm’s model management, which includes directing the investment process and communicating with advisors. Fish will also sit on the firm’s Strategic & Tactical Asset Allocation Committee, a body responsible for the multi-asset, capital market view of LPL. He comes to LPL from J.P. Morgan Asset Management, where he spent nearly two decades as an industry-recognized fund manager leading a variety of investment vehicles for institutional and wealth management. He has managed against large-cap equity, multi-asset, and sustainable mandates during his career. LPL’s Chief Investment Officer Marc Zabicki, had this to say as part of the announcement. “Garrett’s extensive active portfolio management experience, including his international purview, will deepen our investment model management capabilities for the benefit of LPL advisors and their clients. As he joins LPL’s seasoned team of research professionals, his background and experience will also be brought to bear across our entire organization as we work collectively to provide the expertise, rigorous analysis, and valued insights on which advisors and their clients can rely.”
Finsum:LPL bolstered its research team with the appointment of Garrett Fish as Head of Model Portfolio Management.
Direct indexing has been all the rage this year with many researchers predicting it will be the "next big thing" in investing. For instance, a few weeks ago, a report from Cerulli Associates estimated that direct indexing is poised to reach more than $800 billion in assets by 2026. But not all research firms share this sentiment. According to a recent study by asset management research firm Blackwater Search & Advisory, direct indexing is a “niche service that mostly benefits specific high-net-worth investors.” The firm believes that without a wide range of investors, the growth of direct indexing may not be as large as previously thought. According to the report, “Direct indexing is not necessarily the best option for everyone. Not everyone needs or wants the degree of customization that direct indexing offers, and the variety of funds already existing on the market is more than enough to craft interesting portfolios.” Many pundits talked about direct indexing as an “ETF Killer” due to greater personalization and tax advantages. However, ETFs offer a broad range of funds that appeal to a much wider number of investors. So, while direct indexing may continue to grow its market share, it appears that it isn’t the “ETF Killer” it was once projected to be.
Finsum:Based on the results of a recent study, direct indexing may not see as much growth as previously thought due to the strategy mainly benefiting affluent investors.
If DataTrek Research is correct, we can’t expect a new bull market to commence until volatility declines. The research firm said that volatility isn’t expected to decline until two things happen. The first is the Federal Reserve stopping its interest rate hikes and the second is more clarity on corporate earnings expectations as we head into a potential recession next year. The firm believes that if investors can gauge those two factors, then they can capitalize on large stock market returns. They listed the S&P 500's 28% gain in 2003 after the dot-com bubble, the 26% gain in 2009 after the Financial Crisis, and the 61% surge from the COVID-19 low until the end of 2020 as examples. DataTrek co-founder Nicholas Colas stated, "For volatility to structurally decline and drive those high returns, investors need to have growing confidence they know how corporate earnings will develop. This means they must have a handle on monetary/fiscal policy." At present, investors are not sure about those factors. The Fed recently surprised the market when it indicated that it will likely raise rates by another 75 basis points next year and leave them higher for longer. In addition, analyst earnings estimates are all over the place.
Finsum:According to DataTrek Research, investors shouldn’t expect a new bull market in stocks until the Fed stops rising rates and there is more clarity on earnings expectations.
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Merrill Lynch continues its recruitment of veteran advisors with the announcement that it lured away a duo managing $180 million in client assets from Morgan Stanley. The two-person team from Huntsville, Alabama is made up of 26-year veteran Lane P. Wilson and 15-year veteran Teri E. Miller. The pair, which joined Merrill on December 9th, produced more than $1 million in combined annual revenue. At Morgan Stanley, they had been part of a larger team called the Monte Sano Group. At least 11 members of that group remained at Morgan. Wilson started his career at MML Investors Services in 1996, moved to Compass Brokerage two years later, and then moved to Wells Fargo Advisors in 2006. He spent the following 13 years at Morgan Stanley. Miller, who had also been with Morgan Stanley for 13 years, started her career at Invest Financial Corp. in 2007. The office they are joining is part of Merrill’s community markets program that launched in 2018. The program is aimed at growing and retaining brokers in branches outside of Bank of America’s footprint. According to recruiters, Merrill returned to hiring traditional brokers from its rival wirehouses with high-end deals over the summer.
Finsum:Merrill Lynch reeled in a duo from Morgan Stanley that manages $180 million in client assets.
LPL Financial announced that it has nabbed Strategic Partners, a Parsons, Kansas-based practice with 18 advisors and approximately $830 million in advisory, brokerage, and retirement plan assets. Strategic Partners joins from Royal Alliance, an Advisor Group subsidiary, and aligns with National Financial Alliance a San Antonio, Texas-based office of supervisory jurisdiction of LPL. Strategic Partners was founded by Owner and President Chris Lubbers in 1994 while he was still attending college. Lubbers said that he and his firm were attracted to LPL and NFA for their technology, operational efficiencies, and growth opportunities. He stated, “I’m all about efficiency and that’s where LPL shines. The firm has invested heavily in its technology platform, creating efficient processes and enhanced solutions that will help our advisors provide better services. Clients will have easier access to reporting and account information, all in one place to give them a deeper understanding of their financial picture.” He also mentioned that the move will help him and his firm recruit more advisors.
Finsum:LPL announced that it has recruited an 18-person advisor team managing a combined $830 million from Advisor Group’s Royal Alliance subsidiary.
According to a recent survey, market volatility is prompting advisors to actively grow their practices through digital marketing strategies. Broadridge Financial Solutions’ fourth-annual financial advisor marketing survey revealed that 63% of advisors are actively looking for new clients, while only 43% are seeing an increase in inbound prospect inquiries. Financial advisors from both Independent Broker-Dealers (IBDs) and Registered Investment Advisors (RIAs) continue to face challenges stemming from competition, increasing compliance, market volatility, and regulatory pressures. This has forced them to come up with new strategies to grow their book. Broadridge has found that one of the better strategies for advisors to increase their pipelines is by implementing digital marketing. Kevin Darlington, general manager, and head of Broadridge Advisor Solutions stated, “…digital media usage is a bright spot and continues to show upward-trending success, as advisors double down on digital strategies and maximize the use of websites, LinkedIn and Facebook to generate leads." The survey also revealed that the success rate of advisors in converting social media leads into clients has been increasing, climbing from 34% in 2019 to 41% in 2022.
Finsum:The current volatility, along with regulatory pressures, and increased compliance has spurred advisors to grow their books through digital marketing.