Shorts: On Investment Models, Millennials and the SEC

March 21, 2019

If you’re going away for spring break, take these interesting links along with you.

Now that spring has officially sprung, many of you are going to be taking some time off.  Think of this as a short-list of recommended reading for your trip. 

Food for thought on outsourcing your investment strategy

Ok, this may be a bit self-serving, but When should you manage your own investment models? Maybe never is an interesting article that the do-it-yourself (or at least the investment-focused) advisor should read.  According to the Envestnet research quoted, advisors who completed Envestnet’s training program and outsourced investment modeling grew their AUM by 41% year over year vs. 18% for those who didn’t.  This study goes well with our The Value of Time paper (co-written with FP Transitions), which looked at the value of investment-focused vs. client-focused businesses.

Market Insights Report 2019: The wealthiest Americans today are youngerspring flower

Still think it isn’t worth it to market to or create services for millennial clients?  Emily Zulz at Think Advisor reports on Spectrem Group research showing the average age of wealthy cleints actually getting younger in Millennials Now Make up Nearly Half of the Super-Wealthy: Spectrem.  The headline is that millennials make up the largest share of investors with more than $25MM, but the story is also that the number of wealthy US households reached a new high for the 10th consecutive year.  All those people need advice, a plan, and someone who is focused on their needs.  However, this isn’t a one-size fits all world, as the consumer is demanding personalized advice.   How do you customize the outside (advice) and mechanize the inside (your business)? This may help.

Will the SEC follow states’ lead?

When the DOL’s Fiduciary Rule was killed a few years ago, loaded product manufacturers and commission-based salespeople breathed a huge sigh of relief and went back to selling.  The follow up, SEC’s proposed Best Interest Rule, was rolled out for comments and was seen as something without teeth – and again, the salespeople went back to selling.  This article, Don’t Get Too Comfy … Big Surprises Could be in Store in SEC’s Reg BI, Compliance Specialist Warns suggests that, at least in the opinion of Cipperman Compliance Services’ Todd Cipperman, that  with the push of a few states that are creating their own versions, the SEC may come with a surprise. 

Grab your sunscreen

Next week, we will really settle into spring break mode, with posts from both Allie and me.  Look for her post comparing the vacation experience to the client experience and mine on how to make sure you are covered when you take time off.

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