Wealth Management
While it’s often said that changing broker-dealers results in losing 30% of your client book, the actual retention rate depends heavily on where you're leaving from, where you're going, and how the transition is handled. Advisors moving from banks to independence often do face steeper losses, due to legal and structural barriers, while those shifting between independent broker-dealers typically experience much smaller attrition.
The key to maintaining client loyalty lies in how the move is communicated—clients are more likely to stay if they understand how the switch benefits them, not just the advisor. Advisors should frame the conversation around enhanced service offerings, broader product access, reduced fees, or improved technology and stability.
A real-world example saw one advisor retain 98% of clients by clearly articulating these benefits during a move from a failing firm to a more robust platform.
Finsum: Ultimately, when advisors lead with client-first messaging, transitions can not only preserve but even grow their practice.
A wave of fixed annuity contracts sold in 2020 with five-year surrender periods is maturing, potentially unleashing over $70 billion in investable assets. Many of these annuities, purchased at average rates around 2%, are now competing with products offering closer to 5%, giving investors a strong incentive to move their money.
While some clients may shift to higher-yielding fixed annuities, the trend is expected to boost flows into less capital-intensive options like RILAs and fixed indexed annuities. Insurers with strong distribution networks and scalable, SEC-registered products could be best positioned to capture this movement.
At the same time, many traditional fixed annuity issuers are stepping back due to capital constraints, relying more on reinsurers or exiting the market altogether. For advisors, the end of these surrender periods presents both a challenge and opportunity—clients may be targeted by competitors, but those assets can also be redirected into new, potentially more flexible portfolio strategies.
Finsum: Paying attention to these trends in annuities can give advisors a leg up on the competition.
Custodian transitions can make RIAs anxious about losing clients, but careful planning and strong communication can significantly reduce attrition risk. On average, advisors may lose nearly 20% of client assets during a transition, but that figure often reflects poor preparation rather than an inevitable outcome.
The key to a successful move lies in two areas: reinforcing client relationships and clearly explaining the reasons and benefits behind the change. Advisors should prioritize transparency without overloading clients with technical details, offering reassurance, a timeline, and emphasizing how the switch enhances service.
Relationships that feel unstable before a transition may signal deeper issues, making them worth addressing whether or not a move happens.
Finsum: Ultimately, sticking with a subpar custodian out of fear can hurt more than switching—especially if poor service impacts how clients perceive the advisor’s value.
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Active ETFs combine professional management with the liquidity and transparency of ETFs, making them powerful tools for portfolio construction. They offer investors access to active security selection and the potential to outperform benchmarks, while still benefiting from intraday trading, tax efficiency, and often lower costs.
These funds are especially valuable in areas of the market with inefficiencies, where deep research and targeted exposure can improve outcomes. Derivative-income ETFs can enhance portfolio income and stability by generating yield through options, offering an equity-based alternative to fixed income.
Meanwhile, buffer ETFs help manage downside risk by capping losses (and gains) over set periods, making them useful for preserving capital during volatile markets.
Finsum: Together, these active ETF strategies provide investors with flexible, diversified, and goal-oriented components for building resilient and adaptive portfolios.
Once considered obscure and underutilized, interval funds are emerging as powerful tools for investors seeking access to private markets without sacrificing structure or transparency.
Kimberly Flynn, President of XA Investments, has long believed in their potential, seeing them as a middle ground between illiquid alternatives and mainstream accessibility. With investor interest in non-traditional assets on the rise, these funds are experiencing a surge in growth, gaining attention for their ability to offer periodic liquidity while deploying capital efficiently.
Unlike mutual funds, which must maintain daily liquidity, interval funds can hold private assets and still meet redemption requests through built-in buffers and structured liquidity schedules. The uptick in SEC filings, new entrants like KKR and Hamilton Lane, and record inflows suggest that momentum is accelerating, positioning interval funds as a cornerstone of the alternative investing landscape.
Finsum: Interval funds are meeting a specific need right now, and investors willing to sacrifice a little liquidity might be able to get better returns.
Low-volatility ETFs are proving their worth during the current market downturn, outperforming broad benchmarks like the S&P 500. Funds like iShares USMV and Invesco SPLV are both up over 3% year-to-date, even as the Vanguard S&P 500 ETF (VOO) is down nearly 5%.
Despite their performance, these ETFs haven't attracted significant inflows, overshadowed by trendier buffered and defined-outcome products that rely on complex options strategies. Low-volatility ETFs, by contrast, use a simpler factor-investing approach and tend to come with lower fees, making them more cost-efficient.
While they can underperform during strong bull markets, their resilience shines when equities struggle, as seen during major drawdowns in 2022 and 2018.
Finsum: Advisors still value them for clients seeking steadier returns in uncertain conditions, especially as bonds show increasing volatility themselves.