Wealth Management
JPMorgan Chase & Co.’s brokerage unit recently lured a Miami team from UBS Wealth Management USA with $4.8 million in revenue, while also picking up a solo advisor from Goldman Sachs who produced $2.3 million in Boston. The Fernandez Cabrera Group, which is led by Pedro Fernandez and Jesus (J.C.) Cabrera joined J.P. Morgan Advisors on Friday and had overseen $700 million in assets as of year-end at UBS. Fernandez and Cabrera moved along with client associate Charlene Meizoso. They report to Rick Penafiel, regional director for Boston, Miami, and Palm Beach Gardens. Fernandez started his financial career at Sanford C. Bernstein & Co. in 2004 and joined UBS in 2014. Cabrera started as a broker in 1984 at First Investors Corporation and only stayed at the company for a year. He registered again in 2012 when he joined Bernstein. In addition, Brent Herbert joined J.P. Morgan in February after overseeing around $445 million in assets at Goldman. He has 13 years of experience and joined Goldman in 2017 from Mizuho Securities. Herbert also reports to Penafiel. JPMorgan is close to two years into a campaign to double its headcount from the roughly 450 at its traditional brokerage.
Finsum:J.P. Morgan lured away a $4.8 million duo from Miami, while also adding a $2.3 million solo advisor from Goldman Sachs.
Category: Wealth Management
Keywords: JPMorgan, UBS, Goldman Sachs, recruiting
While direct indexing might be ready for added use this year, according to one expert, it’s hasn’t quite hit prime time when it comes to the majority of the wealth management industry, reported fa.mag.com.
“I’m not necessarily of the view that 2023 will be the year that direct indexing becomes broadly democratized,” said Anton Honikman, CEO of MyVest. “There’s a different discussion about bringing direct indexing to a broader market. What’s hindering that is the need for more of an experience with direct indexing.”
He continued: “I’m a fan of direct indexing,” said Honikman. “I think it will continue to grow, and I think it’s emblematic of an inexorable trend towards more personalized solutions.” That said, he also noted it’s “emblematic of the real interest and desire for more tax management -- particularly among the affluent and high-net-worth investors. For those reasons, I’m really positive about its future.”
But this year, however, when it comes to wealth management, direct indexing won’t be omnipresent. Thing is, the technology that will abet the ability of direct indexing to maximize its potential isn’t in place, he noted. The personalization of financial plans and portfolios at scale would be enabled with such technology.
Rather, this year’s game plan will see technologists and wealth management firms remain on the road toward investing in overcoming issues evolving around personalization, added Honikman.
Based on a report by Cerulli Associates, over the next five years, direct indexing’s assets are expected to spike by more than 12% annually, according to investmentnews.com.
While rising interest rates might make things difficult for life insurance company risk managers, they were great for individual fixed annuity sales in the fourth quarter of 2022. According to new issuer survey data from Wink, overall sales of all types of deferred contracts increased 30% between the fourth quarter of 2021 and the fourth quarter of 2022, to $79 billion. Sales of three types of products classified as fixed, traditional fixed annuities, non-variable indexed annuities, and multi-year guaranteed annuity (MYGA) contracts — climbed 102%, to $58 billion. Sheryl Moore, Wink’s CEO, told ThinkAdvisor that MYGA contracts in particular benefited both from increases in crediting rates and consumers’ fear of market volatility. She noted, “Eighteen percent of insurance companies offering MYGAs experienced at least triple-digit sales increases over the prior quarter.” In fact, MYGA contracts jumped 217% to $36 billion, non-variable indexed annuities rose 28% to $22 billion, and traditional fixed annuities increased 18% to $575 million. Wink based the latest annuity sales figures on data from 18 index-linked variable annuity issuers, 48 variable annuity issuers, 51 traditional fixed annuity issuers, and 85 multi-year guaranteed annuity (MYGA) issuers.
Finsum:According to new issuer survey data from Wink, rising interest rates helped sales of all types of deferred contracts rise 30% year over year in the fourth quarter of 2022, to $79 billion.
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Advyzon Investment Management, a turnkey asset management program, announced at the recent T3 Advisor Conference, that the firm is launching its new model marketplace called Nucleus. Nucleus will be fully integrated into the comprehensive, award-winning Advyzon platform built on single source code. Lee Andreatta, CEO and co-founder of Advyzon Investment Management stated, "We're extremely excited to announce the launch of Nucleus, something that has been in the works since we launched AIM in Spring 2022. Adding a model marketplace enhances AIM's TAMP offering and moves Advyzon closer than ever to offering a fully comprehensive solution for financial advisors and investment managers to run their firms." Andreatta and his colleague John Mackowiak, Chief Revenue Officer for Advyzon, shared the news during their T3 main stage session, 'If You Think Your Tech Stack Is Optimized, Think Again: The Benefits of a Comprehensive Solution'. The Nucleus model marketplace is structured for unified managed accounts (UMAs) and will include sleeve-level reporting and trading. Financial advisors will have access to third-party strategists offered in two ways to help their businesses. The first is Advyzon traded, with advisor-built UMAs or pre-set UMA portfolios built by AIM incorporating strategist sleeves and the second is Advisor traded, with Nucleus access available in Advyzon's Quantum Rebalancer – a powerful, in-house trading and rebalancing tool seamlessly integrated into Advyzon's cloud-based platform.
Finsum:Advyzon Investment Management, a turnkey asset management program, recently announced that it is launching its new model marketplace called Nucleus, which is structured for UMAs and will include sleeve-level reporting and trading.
According to a FINRA enforcement executive at Sifma’s recent Compliance and Legal Conference, the regulatory body is planning to complete at least 1,000 Regulation Best Interest exams of broker-dealers by year's end. While FINRA has been examining Reg BI violations since the rule went live, officials have exclusively reported violations in industry-wide notices such as the 2023 FINRA Report on Exam and Risk Monitoring Program, instead of seeking enforcement actions against firms or reps. However, according to FINRA officials, “a year and a half after Reg BI went live, the enforcement gloves are coming off.” Christopher Kelly, FINRA’s acting head of enforcement, said, “A number of the firms that have been warned still haven’t remedied the [violations] the examiners…warned them about, so those will often result in referrals to enforcement.” St. Louis added that FINRA is taking a hard look at variable annuities and has at least one Reg BI enforcement in the works dealing with conflicts surrounding the contracts.
Finsum:After a year and a half of warnings, the gloves are coming off for FINRA as they plan on examining just under one-third of FINRA’s 3,300 member firms for compliance with Reg BI.
While many ESG investors are drawn to the appeal of helping the environment with their investments, the two-year rally in oil and gas stocks has become too much to ignore. The energy sector has led the market for two years rising 135% in 2021 and 2022 compared with a 2.2% gain in the S&P 500 Index. Analysts expect the sector to jump another 22% in 2023, despite its 5.8% decline so far, according to data compiled by Bloomberg. ESG firms have taken notice. Rockefeller Capital Management takes pride in its ESG investing record. While the firm’s larger portfolio follows multiple strategies that include ESG and non-ESG, its $19 billion equity portfolio now has a 6% energy weighting. This is even more than the S&P 500’s energy weighting of 4.8%. Plus, clients in Rockefeller’s wealth management arm, which is separate from its asset management arm, have almost tripled their holdings in Chevron Corp. In fact, the stake’s value has quintupled to $251 million over two years. Their clients have also been buying tens of thousands of shares in Brazilian oil producer Petroleo Brasileiro SA, Diamond Offshore Drilling Inc., and several other S&P 500 Energy Index members, including Exxon Mobil Corp. and APA Corp.
Finsum:With a massive two-year run, and a strong return expected this year, energy stocks have attracted clients of firms such as Rockefeller Capital Management that take pride in their ESG investing record.