Will LPL's new emphasis on recruiting from wirehouses pay off?

Recent moves in the recruiting group at LPL Financial make it clear that the firm is trying to target more registered reps and financial advisers who currently work at wirehouses and convince them to leap to a broker-dealer where they labor as independent contractors rather than employees. LPL is the industry leader in recruiting and […]

Friday links: the list edition

Due to unavoidable circumstances, we are going to something a little different with today’s linkfest. We accumulated a slew of best-of links over the past couple of weeks. Hopefully these lists generate some ideas for you over the coming holidays. Chart of the Day How much time Americans spend on various forms of media. (axios.com) […]

My Big Lessons from 2018

These are the major things I’ve learned this year, in no particular order… Five people who buy into your mission are better than a hundred people who don’t. This applies to clients, to personnel you’re hiring, to partners you’re going into business with, to allies you’re bringing in to a project. There is strength in […]

Podcast links: granular data

Fridays are all about podcast links here at Abnormal Returns. You can check out last week’s links including a look at some of the best investment podcasts of 2018. The biz Finance Business Economy Non-finance

You’re Not Crazy

The resignation of General Mattis and the new bear market in stocks both have a silver lining. They’re the first signs in awhile that you’re not crazy. 35% of America has lost its mind. But the other two thirds has not. It recognizes what is going on and it still reacts accordingly. You are not […]

Don’t Be Your Worst Enemy: Self-Inflicted Wounds Are Terribly Unnecessary

A self-inflicted wound is so sad. Unlike financial blindspots, where you can plead ignorance for your actions, a self-inflicted wound is a willful and always a harmful action that puts you in a worse off situation than before. As the markets tumble, it’s worth highlighting some self-inflicted wounds that could have prevented this fall. We’ll also learn about other common self-inflicted wounds that […]

Why Aren’t You Doing What You Recommend?

[Editor’s Note: Just a reminder that the CityVest deal discussed on the blog last Friday only lasts through the end of the year. If you missed that post, this is basically a chance to get into a private multi-family real estate fund with only a $25K minimum. More details at the blog post link above […]

It’s Not Time to Panic (Yet)

So, the market’s finally gotten a little interesting. It’s been a while. I feel like we’ve been sleepwalking through years of stable and steady market returns. In fact, the last few years have been unusually stable. The 3 year rolling standard deviation of a 60/40 stock/bond portfolio has been just 6.2 since 2010. The average […]

Cetera fined $1.4 million for award-winning broker's excessive trades

Cetera Advisor Networks must pay nearly $1.4 million in fines and restitution in relation to the short-term mutual fund purchases of a former broker, who’d received sales awards from the broker-dealer for two consecutive years. The Financial Industry Regulatory Authority Inc., the brokerage industry’s regulator, fined Cetera Advisor Networks $700,000 and ordered $691,800 in customer […]

Ways People Put Off Actually Dealing With Their Money

I regularly assign my clients money-related homework assignments, and I’ll be the first to tell you that it’s hard to deal with your money. I struggle, too! (That’s why I hire a financial planner myself.) I also try to help my clients knock out a few tasks during their meetings so they feel accomplished after […]

T shares are dead

The Department of Labor fiduciary rule was expected to usher in a new era of mutual fund share classes that were more transparent and leveled the playing field for advisers. The death of the regulation altered the course of that revolution. One of those share classes, T shares, is extinct, and another class, clean shares, […]

Thursday links: expiring knowledge

Want to stay up-to-date with all of our posts? Sign up for our daily e-mail newsletter and get all the good stuff when it comes out. Quote of the Day “There are two types of information in investing: stuff you’ll still care about in the future, and stuff that matters less and less over time. […]

Surprise tax hit awaits investors in hedge funds

A surprise tax blow could be looming for investors in hedge funds such as Point72 Asset Management. President Donald J. Trump’s tax law curbs the coveted deductions that most businesses were allowed to take for the interest they pay on loans. During the tax overhaul debate, private-equity firms were the fiercest critics of the provision, […]

Startup links: startup playbooks

Thursdays at Abnormal Returns are all about startup and venture capital links. You can check out last week’s links including a look at the super-fast growth in the scooter business. Quote of the Day “There’s no playbook for coming up with business ideas.” (Khe Hy) Co-working Companies IPOs Advice Venture Off the coasts Startups

The Big Jump

The average holding period for a mutual fund is something like three years. This is an average, so some people have more patience and some have less. But that’s at the product level. What about the average holding period for a particular investing strategy? Let’s just say that it’s probably similar. The reality of the […]

Retirement savings legislation dies in lame-duck Congress

Legislation that would expand the number of company-sponsored retirement plans and increase the use of annuities within them will likely die on Thursday. Proponents of the bill, which was introduced after Thanksgiving, were hoping it would be attached to legislation to fund the government that must pass by Friday. But on Wednesday, Senate Majority Leader […]

SEC charges business journalist, 12 others who sold Woodbridge Ponzi

The Securities and Exchange Commission said Wednesday that it had charged an additional 13 individuals, including a former financial journalist, with unlawfully selling the securities of Woodbridge Group of Companies, a $1.2 billion Ponzi scheme that collapsed last December and filed for bankruptcy. The 13 individuals charged were among Woodbridge’s top salespeople, selling more than […]

Well, that could have gone better…

This morning I explained briefly why I thought the Federal Reserve had an opportunity to pause today as opposed to doing its widely expected fourth interest rate hike of 2018. But they hiked. And, I guess, attempted to accompany the hike with somewhat dovish language to cushion the blow, sort of? It didn’t go well. […]

SEC's latest on fiduciary: Advisers can customize individual client agreements

When Securities and Exchange Commission chairman Jay Clayton asserted at a congressional hearing last week that investment advisers can “contract around” their obligation to act in a client’s best interests, it caused some head scratching in the adviser community. In response to being pressed by Sen. Elizabeth Warren, D-Mass., about the SEC’s investment advice reform […]

Wall Street could be facing fewer fines in 2019 as lone SEC Democrat leaves

For Wall Street banks and other companies accused of malfeasance, the risk of getting slapped with a big fine by the U.S. Securities and Exchange Commission will soon drop significantly. That’s because Kara Stein, the SEC’s lone Democratic commissioner, has to leave the regulator at the beginning of next year. Until President Donald J. Trump […]

Wednesday links: order versus chaos

Want to stay up-to-date with all of our posts? Sign up for our daily e-mail newsletter and get all the good stuff when it comes out. Quote of the Day “As humans we seek the ordered, the linear, and the smooth, but the world gives us the chaotic, the curved, and the jagged. This dichotomy […]

Financial advisers put market volatility in perspective for clients

No, Virginia, there is no Santa Claus rally this year, and that has advisers scrambling to calm clients as the financial markets head toward the worst December in 50 years. With the U.S. stock market having dropped into correction territory, and now down more than 14% from its September high, it’s only logical that financial […]

New bill links 401(k) matches to student loan payments

A bill introduced in the Senate would allow employers to pair workers’ student loan payments with 401(k) savings. Ron Wyden, D-Ore., the ranking member on the Senate Finance Committee, sponsored legislation on Tuesday that would give plan sponsors the option of making a 401(k) matching contribution for employees who are paying back student loans. Current […]

SEC slaps Ancora Advisers with $100,000 fine for pay-to-play violations

The Securities and Exchange Commission on Tuesday censured and slapped a $100,000 fine on Ohio registered investment advisory firm Ancora Advisors for violating industry rules that forbid advisers from contributing to political campaigns of officials in governments that they do business with. Based in suburban Cleveland, Ancora has $4.6 billion in client assets and counts […]

Welcome to the (client) revolution

It’s time for a better valuation method for wealth management. Most criteria today rely on objective data points — assets under management, number of accounts, product mix or fee-based revenue. They’re important measures for sure, but limited in their ability to accurately predict the potential challenges and opportunities facing the practice. Savvy buyers of advisory […]

Personal finance links: having a plan and sticking with it

Wednesday is all about personal finance here at Abnormal Returns. You can check out last week’s links including a look at why $1 million ain’t what it used to be. Quote of the Day “Daily, weekly, monthly, and even yearly fluctuations shouldn’t have an impact on the long-term investor with a thought-out financial plan. You […]

Growing chasm between rich and poor divides country into two Americas

U.S. unemployment is near a 50-year low, economic growth is brisk and the stock market — despite a disappointing 2018 — has paid generous returns since the financial crisis of a decade ago. But not for everyone. The chasm between rich and poor hasn’t been this wide since data collection began in the 1960s. Workers […]

Focus on fees: Tips from top performers

An InvestmentNews Research prediction for 2019: Despite all of the discussions around fee compression, the asset-based fee charged by most advisory firms will not change substantially next year, but we do expect that more firms will place an emphasis on creative – and strategic – changes to their overall fee structure and philosophy. In our […]

Calculating Social Security survivor amounts

Some of my favorite column ideas come from readers’ questions. This is one of them. A financial adviser wrote to me recently regarding a client who wants to wait until age 70 to claim his Social Security retirement benefit to ensure that his surviving spouse would get the largest possible survivor benefit. For each year […]

Unforced Errors

I have to make this quick but I want to mention it… Here’s the CEO of Fedex, whose stock is tanking this morning after saying this, while slashing earnings and revenue guidance for 2009: “This is very, very important, and I’ll just conclude by saying most of the issues that we’re dealing with today are […]

UBS Wealth embraces exotic strategies to battle market headwinds

The world’s largest private bank is doubling down on exotic strategies to profit from the intensifying meltdown in the synchronized bull market. As Wall Street frets another annus horribilis, UBS Global Wealth is embracing a playbook beloved by hedge funds — a slew of options trades that bet, for example, on the continued outperformance of […]

Investors pour record cash into value ETF

The great rotation to value continues. Whether it can last is another question. The $38 billion iShares Russell 1000 Value ETF (IWD) took in around $1.1 billion last week, the third most since the fund started trading in May 2000. And its previous highs were from rebalances in 2007 and 2014 that were part of […]

Investors flee biggest financials ETF at fastest pace since 2008

As fears about future economic growth roil markets, financial firms are falling out of vogue with ETF investors at a pace unseen since the collapse of Lehman Brothers. The $24 billion Financial Select Sector SPDR Fund (XLF) had $1.8 billion of outflows last week, the most since July 2008. The $24 billion fund has seen […]

Changes to IRMAA for 2019

For 2019, there is a change to the Income-Related Monthly Adjustment Amounts (IRMAA) for Medicare. The change is to add another level of adjustment to IRMAA for 2019. In the past, there were five levels of IRMAA. For 2019, there is a new level added to the top end of the IRMAA adjustments. IRMAA for […]

Betterment adding commodities to adviser platform

Betterment is expanding the menu of asset classes available to advisers using the white-label version of the digital-advice platform. Beginning Wednesday, advisers can customize client portfolios managed by Betterment for Advisors with exposure to commodities from GraniteShares’ Bloomberg Commodity Broad Strategy No K-1 ETF (COMB). The addition of commodities is an expansion of Flexible Portfolios, […]

The Biggest Benefits Of A Stock Market Meltdown

Today is an exciting day. Today we find out whether Fed Chair and centimillionaire Jerome Powell helps ignite the DIRE Movement by telegraphing aggressive rate hikes in 2019 to stem nonexistent inflation or whether he decides to ease off the gas given the recent meltdown in the stock market. A market-friendly Fed Chair would take […]

7 Tips to Avoid Investment Scams

[Editor’s Note: The following guest post was submitted by Mark Pugsley, a lawyer who specializes in recovering losses for victims of investment fraud, unsuitable recommendations, and Ponzi schemes. He is a local attorney here in Utah. We met over lunch one day and lamented the prevalence of financial scams in the world, the epicenter of […]

Let’s Talk About QE and Assflation

I was on Twitter talking about how Donald Trump knows nothing about monetary policy and how Jerome Powell and the Fed should ignore him. It’s true. Trump really knows nothing about this stuff. For instance, take a look at some of his old Tweets on QE. They’re basically a rambling mess of hyperinflation predictions. The […]

Husband of UBS banker sued by SEC for insider trading

His fiancée didn’t know he was eavesdropping. He swiftly made more than $250,000. They got married. Then the Securities and Exchange Commission showed up. Now the husband of a banker at UBS Group has settled allegations that he traded on inside information after listening in on his future wife’s conversations about an upcoming deal. Peter […]