Archives: Articles

IssueM Articles

17 life-annuity issuers meet Conning’s ‘multi-year success criteria’

Posted on November 10, 2016 by Editorial Staff -

Conning has released the seventh edition of its annual study evaluating individual life-annuity companies. The study identified 17 companies in three size categories that met its “multi-year success criteria,” the research firm announced this week. The consulting firm did not make the names of the companies public.

“We identified seventeen companies that met our multi-year success criteria across the three analyzed size categories. Of those successful companies, thirteen also met the criteria in last year’s analysis, which is a significant accomplishment in this challenging environment for new sales and low interest rates,” said Terence Martin, Conning’s director, Insurance Research.

The study, “2016 Individual Life-Annuity Growth and Profit Leaders: Leading for the Long Term” analyzes insurer performance, names the growth and profit leaders, and identifies characteristics shared by those successful firms.

“Companies that met our criteria to be considered growth and profit leaders did so by successfully managing market and organizational complexity,” said Steve Webersen, head of insurance research at Conning.

“For some, sustained product focus was a critical component. The successful product mix differed between the small and mid-sized company categories. Expense and investment performance advantages made significant differences for many of the leading firms, with nuances among the size categories,” he added. “Close analysis of the strategies and positions of peer companies that have excelled in these financial measures yields insights for companies of any size to improve its performance.”

Trump and the Trajectory of Interest Rates

Posted on November 9, 2016 by Kerry Pechter -

As soon as Donald Trump sealed his Electoral College victory over Hillary Clinton, analysts at banks, fund companies and consulting firms released predictions about the election’s impact on interest rates. No one can do more than guess.

Until Tuesday, the Federal Reserve appeared on track to raise the fed funds rate by a quarter of a point at its December meeting. Now that looks less likely. Trump said during the campaign that stock prices would drop if rates go up and accused Janet Yellen of holding rates down to help Democrats.

As for the markets’ immediate reaction yesterday, Bankrate.com reported that “the prospects of higher government spending and more government borrowing for infrastructure improvements sent long-term Treasury yields racing higher. The 10-year Treasury note yield soared above 2%…, closing at 2.07%, the highest since Jan. 22.”

Here are few of the predictions published yesterday. The probability of a December rate increase “has fallen sharply” following the election, said Dominic Rossi, global CIO for equities at Fidelity International.

“The dollar, which has been trending higher in anticipation [of a Hillary Clinton victory], has consequently reversed. Both were threats to the bull market, and these have now been postponed. Monetary policy will remain accommodative,” he wrote.

Andrew McCormick, the head of T. Rowe Price’s U.S. taxable bond team said in a new white paper that U.S. short-term rates may go lower initially as investors seek the haven of U.S. Treasuries, but “there could be pressure for rates to go higher as investors digest the deficit spending pushed by Mr. Trump.”

The New York Times noted Wednesday that in the campaign Trump promised a large tax cut, up to $1 trillion in spending on infrastructure, and new barriers to imports. By stimulating the economy, those policies could foster inflation and inspire the Fed to raise rates.

At Aite Group, analyst Julie Conroy seemed to take Trump’s accusation of artificial rate-suppression by Yellen as a call for higher rates. “Trump has clearly stated that he believes that interest rates are being held at an artificially low rate, so expect to see a rate hike early in his term,” she said.

Her colleague, Gabriel Wang, added, “the market may experience an immediate increase in interest rates. However, given the expected short-term market turmoil, it is unlikely that the Fed would be willing to raise rates immediately in the middle of a market period with heightened volatility.”

Some commentators think a December rate hike by the Fed is still possible or even likely. Mark Dowding, co-head of investment-grade debt at BlueBay Asset Management, wrote that the U.S. economy “retains reasonable momentum and, … if US asset markets stabilize, the Federal Reserve remains likely to raise rates in December.”

David Lloyd, head of institutional fixed-income portfolio management at M&G Investments, said, “Much of what Trump has said suggests the balance of risks is towards a more hawkish Fed. In the short term, the market will obsess over whether Trump’s rhetoric softens somewhat – i.e., whether he tries to forge a constructive working relationship with Yellen. If he sticks with his campaign tone, the rates market could get quite lively.”

In its post-election commentary, Goldman Sachs Asset Management said it expected “volatility to remain elevated over the near to medium term” and that market reaction to the election result is likely to resemble the UK referendum scenario, including:

A volatile, risk-off response, followed by
A gradual reversal as investors recognize that changes under a Trump administration will take time to play out and the Federal Reserve is likely to remain in wait-and-see mode, and then
Isolated bouts of volatility as the administration’s policy priorities, and ability to execute them, become clearer. As a result, we expect volatility to remain elevated over the near to medium term.

One observer believes that Yellen’s job is jeopardy. “Given Trump’s critical statements on the Fed, it seems likely that he would push for a change of leadership as soon as Yellen mandate’s end on January 2018,” said Monica Defend, head of Global Asset Allocation Research, Pioneer Investments.

Once in office, Trump can fill two vacancies on the Fed’s seven-member board. In 2018, when their terms end, he can replace the Fed’s top officials, Janet L. Yellen, the chairwoman, and Stanley Fischer, the vice chairman.

The View from the (DOL) Trenches

Posted on November 3, 2016 by Kerry Pechter -

Just a few years ago, mutual fund companies happily anticipated the “rollover opportunity”—a windfall that would come from managing the trillions of dollars in Boomer savings that were pouring out of 401(k) plans and into retail IRAs. “Capturing Rollovers” was their mantra.

Asset managers’ euphoria ended last spring, however, when the Labor Department released the final version of its conflict-of-interest rule. Starting in April 2017, the business of selling mutual funds to retail IRA clients will be held to nearly the same ethical standards as selling mutual funds to participants in qualified plans.

Financial services companies, especially the brokerage sector where employee-advisors earn commissions from manufacturers on the sale of funds and annuities, are now adjusting to the new rule. The actions of these distributors will have a big impact on the asset managers and insurers who rely on them to market their mutual funds, ETFs and annuities.

In Boston two weeks ago, hundreds of dark-suited mutual fund company executives gathered for the Money Management Institute’s Fall Solutions conference. During one general session, they heard experts from Morningstar, PwC and Envestnet—firms that are helping guide asset managers and broker-dealers through the DOL transition—share insights from the front lines of the disruption.

Jeff Schwantz of Morningstar, Arjun Saxena of PwC and James Lumberg of Envestnet described a world where broker-dealers’ product shelves will shrink, fund companies will condense their offerings, advisor compensation and revenue-sharing will be “levelized,” holistic planning will replace investment selection as advisors’ core competence, and compliance teams will call on IT departments to help them document and, if necessary, defend every step of the advisory process.

Shrinking product shelves

Saxena (right), a principal in PwC’s New York office, predicts that a lot of actively managed funds with high expense ratios and rich front-end loads will simply vanish. “At broker-dealers using the BIC exemption and offering commission-based retirement accounts, here will be a constrained product shelf—mutual funds and annuities—for retirement clients, and the box of allowable financial advisor discretion on pricing will also get smaller,” he said.

“If firms used to have 4,000 mutual funds available for retirement investors, in the future they will have one-fourth fewer funds,” he added. “At the same time, the fund manufacturers will take a hard look at their own lineups, and they will merge or kill the so-so performers or the ones that had high fees or low take-up by investors. It’s probably healthy. At one time, there were more funds than listed equities in the US market.”

Commissions are likely to be standardized across products. “Broker-dealers are looking for BIC-friendly share classes. They are having discussions about mutual fund share class design with asset managers. Right now you have gradation in fund design. When one asset manager has a class A US mid-cap equities fund that pays a 3.5% front-end load, another has a 2.5% load and another has a 4.5% front-end load, it’s hard for a wealth manager to say that there’s no conflict of interest in choosing among them,” Saxena said.

“The easy way for a broker-dealer to offset that conflict is to say, here’s our new preferred standardized design, and have that new share class design uniformly apply to all asset managers who want be on the brokerage IRA platform MF product-shelf going forward.”

Saxena added, “The reality is that the need for risk mitigation will force broker-dealers to lean more toward simpler products in retirement accounts, and their advisors will do the same. That’s the direction we’ll see over time. If you want to see the future, just look at the 401(k) world. Three, five or seven years out, the IRA space will likely look a lot closer to that.”

Revenue-sharing will be levelized

Just as commissions that broker-dealers pay advisors will be standardized, so will the revenue-sharing dollars that fund wholesalers pay to broker-dealers, Saxena said. “Previously, a top asset manager might have paid a wirehouse a couple of million dollars in annual platform access fees. That payment might have allowed the asset manager to present at advisor sales conference or make a certain number of wholesale calls on the broker-dealer,” he said.

“There will be discussions and negotiations between broker-dealers and asset managers. The larger distributors that have critical mass will have the most negotiating leverage. They will be the market makers. That’s the process that’s underway now. There’s no easy way around it,” the PwC principal added.

Broker-dealers exercise control

Depending on their relationships with their advisors, broker-dealers may try standardize the processes that advisors use with clients, if only to simplify their new compliance responsibilities under the DOL rule.

“It remains to be seen how prescriptive around financial planning the [distributors] will get,” said Jeff Schwantz, head of Advisor Solutions, North America, at Morningstar. “Will there be one financial planning solution utilized for all clients? Some firms will go with full-fledged planning. Some firms will adopt a single sales process that they feel good about. If you’re a wirehouse wealth manager or a captive advisor, the sales process is already prescriptive and homogeneous. If you’re an independent advisor, you have historically had more autonomy to provide advice and a wider choice of products.”

Saxena noted, “Some advisors are used to running their own franchise, but that box has gotten smaller. Their employers will be saying, ‘I’ll take a more active role in deciding which funds get to stay on my product shelf or not for retirement clients.’”

‘Ripple effect’

Changes in one link of the fund distribution chain will inevitably force changes in other parts—in ways that no one can currently predict, according to Schwantz (below left). He wonders what will happen if advisors start charging by the hour or go on retainer instead of charging on the basis of account value.

“How soon will the phenomenon of ‘episodic advice’ become the norm, and how will it affect others in the product chain? It’s a challenging problem,” he said. “If advisors start charging retainers, how will other service providers in the chain be affected? The other service providers might not be aligned to that model.

“For instance, today, financial institutions incur clearing and trading fees and today pass those fees along to the client. That creates friction points. If the client is paying the advisor a flat retainer, the way attorneys and other professionals are paid, but a service provider is aligned to fees that are expressed in basis points, the friction intensifies. How will that put pressure on firms that are wed to a basis-points model? How will they unwind that model and stay relevant as providers?”

Holistic financial plans

It’s widely agreed that one-off product sales will be hard to defend under the DOL rule. To justify a product recommendation, the advisor will have to show that the product plays a logical role in a comprehensive plan, and then show that the plan is in the client’s best interest.

“The focus has been moving from the product view to the portfolio view to the household view,” said Schwantz. “Advisors will have to answer the questions, ‘How does the product work in the portfolio? What purpose does it serve?’

“The DOL doesn’t see how ‘best interest’ can be delivered without a plan,” said James Lumberg (below right), co-founder and executive vice president at Envestnet, the Chicago-based technology platform provider. “Knowledge of the client, the creation of a plan, the implementation of the plan—documenting each of these will be part of documenting best interest. Tying what you’ve done back to the client’s specific situation will be an important part of showing due diligence.”

A single standard for all accounts

Increasingly, industry members are predicting that the standards set by the DOL rule will eventually apply to all accounts, IRA and taxable. In a world where many clients have both kinds of accounts, and where advisors are trying to be more holistic, it’s awkward to do otherwise.

“If the advisors put their “white hats” on for retirement accounts and take them off for non-qualified accounts, there’s a difference in client experience,” Schwantz said. “Morningstar surveyed broker-dealers in January through March. They were evenly divided in how they would deal with two different experiences. But a more recent survey showed that approximately 80% of the firms say the sales experiences will be similar and not differentiate between retirement and non-qualified accounts.”

This means signing the Best Interest Contract and accepting the liabilities that go with it. “Early on, we heard people saying, ‘We won’t use the BIC. We won’t put ourselves in that position,’” Lumberg said. “They were driven by a desire for risk avoidance and by ignorance about the BIC. But as they’ve become more comfortable with the rule, they’ve decided that they’d rather use the BIC [and take the risk of lawsuits] than risk being out of compliance [and vulnerable to DOL action]. We’re hearing more and more firms saying, ‘We’ll BIC everything.’”

“To have two stories is not workable long-term,” said Saxena. “You need a unified client experience. It’s more a practical problem for advisors than a regulatory requirement. It’s difficult for an advisor to tell clients that their advice on taxable accounts is different from their advice on pre-tax accounts. You will see many firms offering similar if not the same product offerings on taxable and pre-tax accounts. There’s an expectation that, perhaps in 2018, the SEC will act to harmonize its regulations with the DOL’s.”

Document your process

Because the DOL rule gives investors the right to sue for violations of their best interests, brokerages need to start preparing now for the class action lawsuits they may face in four or five years. That means integrating currently unconnected data sets and configuring information technology systems to do so.

“ERISA standards by their nature are prudent process-driven,” said Schwantz. “Financial institutions need to carefully scrutinize their decisions within their value chain and then document those decisions in writing. Show your investment committee process. Show all the analyses that you did. Show how you arrived at the recommendations you made to clients.

“That’s what most organizations are thinking now. They’re appointing BIC officers, and trying to show, ‘Here are all the processes within the value chain on how we use to show clients that our advice is in their best interest. That’s the risk mitigation process. And it’s likely to require new information technology to scale,” he said.

“Under the suitability standard, firms weren’t necessarily capturing the rationale for their advisors’ recommendations,” Saxena said. “Now the compliance departments will say, ‘You have to capture the data about the clients’ circumstances and the advisor recommendations starting at the point of sale, and then retain it for at least six years.’”

Simplicity is better

Financial institutions are racing to become compliant with the DOL rule by either the preliminary deadline next April or the hard deadline on January 1, 2018, but some have a lot of work to do. “Many of the broker-dealers are still searching for a light switch in a dark room,” said Lumberg. “They’re not as ready as they should be.

“I’m seeing two approaches to the rule among broker dealers. One approach is to say little about the DOL change, lie low, and promise nothing to clients. The other is to come out and offer a robust new value proposition. So it’s both a burden and an opportunity.”

He tends to look on the bright side. “The DOL rule is good for investors, and it offers opportunities for those who deliver more value and for the robo-advisors,” said Lumberg. “Digital innovation benefits investors. It’s an opportunity to simplify things. Over the long term, simplicity is better for the industry and for clients.”

Big Danger at the Lower Bound

Posted on November 3, 2016 by Kenneth Rogoff -

Markets nowadays are fixated on how high the US Federal Reserve will raise interest rates in the next 12 months. This is dangerously shortsighted: the real concern ought to be how far it could cut rates in the next deep recession. Given that the Fed may struggle just to get its base interest rate up to 2% over the coming year, there will be very little room to cut if a recession hits.

Fed chair Janet Yellen tried to reassure markets in a speech at the end of August, suggesting that a combination of massive government bond purchases and forward guidance on interest-rate policy could achieve the same stimulus as cutting the overnight rate to minus 6%, were negative interest rates possible. She might be right, but most economists are skeptical that the Fed’s unconventional policy tools are nearly so effective.

There are other ideas that might be tried. For example, the Fed could follow the Bank of Japan’s recent move to target the ten-year interest rate instead of the very short-term one it usually focuses on. The idea is that even if very short-term interest rates are zero, longer-term rates are still positive. The rate on ten-year US Treasury bonds was about 1.8% at the end of October.

That approach might work for a while. But there is also a significant risk that it might eventually blow up, just the way pegged exchange rates tend to work for a while and then cause a catastrophe. If the Fed could be highly credible in its plan to hold down the ten-year interest rate, it could probably get away without having to intervene too much in markets, whose participants would normally be too scared to fight the world’s most powerful central bank.

But imagine that markets started to have doubts, and that the Fed was forced to intervene massively by purchasing a huge percentage of total government debt. This would leave the Fed extremely vulnerable to enormous losses should global forces suddenly drive up equilibrium interest rates, with the US government then compelled to pay much higher interest rates to roll over its debt.

The two best ideas for dealing with the zero bound on interest rates seem off-limits for the moment. The optimal approach would be to implement all of the various legal, tax, and institutional changes needed to take interest rates significantly negative, thereby eliminating the zero bound. This requires preventing people from responding by hoarding paper currency; but, as I have explained recently, this is not so difficult. True, early experimentation with negative interest-rate policy in Japan and Europe has caused some disenchantment. But the shortcomings there mostly reflect the fact that central banks cannot by themselves implement the necessary policies to make a negative interest rate policy fully effective.

The other approach, first analyzed by Fed economists in the mid-1990s, would be to raise the target inflation rate from 2% to 4%. The idea is that this would eventually raise the profile of all interest rates by two percentage points, thereby leaving that much extra room to cut.

Several central banks, including the Fed, have considered moving to a higher inflation target. But such a move has several significant drawbacks. The main problem is that a shift of this magnitude risks undermining hard-won central bank credibility; after all, central banks have been promising to deliver 2% inflation for a couple of decades now, and that level is deeply embedded in long-term financial contracts.

Moreover, as was true during the 2008 financial crisis, simply being able to take interest rates 2% lower probably might not be enough. In fact, many estimates suggest that the Fed might well have liked to cut rates 4% or 5% more than it did, but could not go lower once the interest rate hit zero.

A third shortcoming is that, after an adjustment period, wages and contracts are more likely to adjust more frequently than they would with a 2% inflation target, making monetary policy less effective. And, finally, higher inflation causes distortions to relative prices and to the tax system – distortions that have potentially significant costs, and not just in recessions.

If ideas like negative interest rates and higher inflation targets sound dangerously radical, well, radical is relative. Unless central banks figure out a convincing way to address their paralysis at the zero bound, there is likely to be a continuing barrage of outside-the-box proposals that are far more radical.

For example, the University of California at Berkeley economist Barry Eichengreen has argued that protectionism can be a helpful way to create inflation when central banks are stuck at the zero bound. Several economists, including Lawrence Summers and Paul Krugman, have warned that structural reform to increase productivity might be counterproductive when central banks are paralyzed, precisely because it lowers prices.

Of course, there is always fiscal policy to provide economic stimulus. But it is extremely undesirable for government spending to have to be as volatile as it would be if it had to cover for the ineffectiveness of monetary policy.

There may not be enough time before the next deep recession to lay the groundwork for effective negative-interest-rate policy or to phase in a higher inflation target. But that is no excuse for not starting to look hard at these options, especially if the alternatives are likely to be far more problematic.

Anecdotal Evidence: How to Charm a Client

Posted on November 3, 2016 by Kerry Pechter -

A friend who lives in one of America’s most desirable brains-and-money towns recently told me that he decided to move his $1.5 million investment portfolio to a wealth manager at one of the wirehouses. After a quick mental calculation of the potential costs, I asked why.

The advisor had done him a big unsolicited favor, my friend said. Before their formal relationship began, while chatting over coffee, my friend told the advisor about a problem he was having with his son’s private school tuition bill. His son needed to leave the school at mid-year. But the school wanted him to pay $12,000 for the cancelled semester.

Later, the advisor gave my friend a call. He had taken the liberty of intervening in my friend’s dispute with the school and had resolved the matter. The school had withdrawn its claim to the $12,000. The exact details remain a mystery to me, but the advisor must have redeemed a favor from what Tom Wolfe, in Bonfire of the Vanities, famously called the “favor bank.”

Imagine the relief that you’d feel on hearing such news. No need to call your lawyer and play hardball with the school. No need to argue with the ex-wife about who screwed up. No sunk cost to fester in the pit of your stomach. Think of the gratitude that a prospect would feel toward such an effective fixer.

Wealth managers of the world, the message is clear. When dealing with your HNW clients and prospects, success depends less on performance or fees than on solving clients’ problems and simplifying their complex lives. They will appreciate you for it, and you need only say, ‘It was nothing.’ I’m not the first to observe this principle. I’m just offering more evidence for it.

Out of professional curiosity, I asked my friend about the wirehouse fees. The advisory fee would be 75 basis points a year; that works out to about $1,000 a month. He didn’t know yet what the fees on his underlying investments would be. Did he realize, I asked, that he might pay upwards of $200,000 in fees over the next 10 years?

Knowing that his grandfather lived past 90, I suggested that my friend apply $100,000 to a deferred income annuity starting at age 85, park the rest of his portfolio in low-fee ETFs and cut his anxiety level in half. But he had already made up his mind to go with the wirehouse advisor. To be sure, my friend did not get rich by being a fool: he was an early Apple investor. Either way, his financial future is not in jeopardy.

The dishwasher technician’s mistake

Never underestimate the financial naïveté of Americans who have had little exposure to our industry. Recently, a young technician came to my house to repair our computerized dishwasher. We started talking about personal finance. After the repair was finished, we opened my laptop and looked at a few sites online, including Betterment.

To get started with Betterment, you input your age and income. He did that, and hit the Continue button. The next screen asked him to choose from three financial goals. He selected “an annual retirement income of $57,900.” What surprised me was his delight and on learning that Betterment could provide him with almost $58,000 a year in 38 years. I explained that the income depended primarily on his saving habits. Beware of hearing precisely what you hoped to hear, I told him.

My plan to petition the airlines

Do you ever check a piece of luggage at the airport, and responsibly pay the $25 baggage fee? (Southwest Airline customers can ignore this question.) Did it gall you to reach the gate and find that people who didn’t check their bags at the ticket counter could check their bags for free at the gate—because the overhead racks were full?

I’ve wondered what behavioral finance gurus like Daniel Kahneman or Mier Statman would make of this. Are these luggage-huggers actively gaming the system? Do they gloat over saving $25? Or do they dread trekking down to the dimly lit baggage claim area, to stare at the revolving “carousel” with the rest of us, lunging for their bag when it sails by? I may petition the airlines to let checked bags fly free, and charge $25 for using the overhead bin. Imagine that.

Life insurers ‘out of levers’ to fight low rates: Conning

Posted on November 3, 2016 by Editorial Staff -

The life-annuity industry is running out of levers to boost returns in the extended low interest rate environment, according to a new study by Conning. Besides raising allocations to lower quality bonds, remedies to the yield-drought are hard to find.

“Life-annuity insurers have lived with the decreasing interest rate environment for more than a decade, and for the past five years have been under increasing pressure as interest rates dipped to historically low levels,” said Mary Pat Campbell, vice president, Insurance Research at Conning.

“Insurers have been shifting allocations to reach for yield. This shift was pronounced from 2011 to 2015, as the impact of the financial crisis faded and the bite of low interest rates intensified. The dominant industry response has been in shifting bond credit quality, as insurers increased allocations to BBB-rated bonds for extra yield, while at the same time keeping below investment grade allocations at historic lows.”

The Conning study, “Life Insurance Industry Investments: Where are the Return Levers?” analyzes life industry investments for the period 2011-2015 for the industry as a whole, by insurer size, and for five peer groups. The study discusses strategic issues facing life insurers and examines the industry’s investment profile in detail.

“As insurers take on additional risk to boost returns, there can be consequences of potential losses,” said Steve Webersen, head of Insurance Research at Conning. “The shift to greater reliance on BBB-rated bonds is widespread over the industry, and represents a further credit risk concentration. This shift to BBB-rated bonds has performed well over 2011 to 2015; yet the question remains as to how long that performance can continue. Just as important, what investment return levers remain for the industry in the future?”

“Life Insurance Industry Investments: Where are the Return Levers?” is available for purchase from Conning by calling (888) 707-1177 or at www.conningresearch.com.

Cambridge advisors will use the BIC, accept “levelized” commissions

Posted on November 3, 2016 by Editorial Staff -

Cambridge Investment Group, which serves some 3,000 independent advisors nationwide through its registered investment advisor and broker-dealer entities, will continue to support both fee-based and commission-based accounts for its advisors’ IRA clients, the firm announced this week.

Like Raymond James and Morgan Stanley—but unlike Merrill Lynch—Cambridge will let commission-based advisors serve retirement clients. Under the new Department of Labor conflict-of-interest rule, those advisors can do so only if they pledge to act in clients’ best interests, not their own or their firms’.

Cambridge intends to apply the Best Interest Contract provision announced by the DOL last April for certain commission-based accounts. Commissions will be the same (“levelized”) for similar investment options. Discretionary advisory business will be supported through level fee (a percentage of assets under management) platforms.

“Cambridge has long been a leader in fee-based accounts, but we believe the investing client and their trusted financial advisor must have access to appropriate choices they can consider for their unique retirement needs,” said Amy Webber, president of Cambridge. “We’ve identified four business paths our advisors can choose from.”

The four business paths are:

Non-retirement investing client (with after-tax accounts).
Small accounts (under $25,000).
Best Interest Contract (IRA clients with commissioned advisors).
Level fee fiduciary (Investment advisor representatives who charge a percentage of assets under management).

Cambridge said its Fiduciary Services team is creating Advisor Fiduciary Plans. The plans will show advisors how their accounts are affected by the new DOL rule, and how they can comply with the rule by the April 10, 2017 preliminary deadline and the January 1, 2018 final deadline.
Cambridge Investment Group, Inc. is a privately controlled firm consisting of multiple broker-dealers and RIAs, including Cambridge Investment Research Advisors, Inc., a large corporate RIA; Continuity Partners Group, LLC, a special purpose broker-dealer and registered investment advisor; and Cambridge Investment Research, Inc., an independent broker-dealer.

Advisors: Your next prospect could be a “mystery shopper”

Posted on November 3, 2016 by Editorial Staff -

Just in time for Halloween, Fidelity Clearing & Custody Solutions (FCCS) announced a “Mystery Shopping” program for registered investment advisory firms.

That’s correct. Real investors—not actors—will pose as typical prospects, interact with financial advisors, and then report their levels of satisfaction with the sales process to the advisor’s firms.

Sounds scary, especially for the advisors who don’t know they’re being evaluated.

A unit of Fidelity Investments, FCCS has hired two independent market research firms to conduct the program. FCCS clearing and custody clients—registered investment advisors (RIAs), retirement plan recordkeepers, broker-dealers, banks and insurance companies—will get a price break when they use the program.

To get an “A” on this test, advisors should try to make a warm first impression. In its release, FCCS cited Cerulli research showing that today’s advisors believe clients choose them on the basis of their “personable image” and “high-touch service” much more than for an “exclusive or high-end image.”

“Advisors need to be keenly aware of how they may ‘fit’ with each prospect,” said David Canter, executive vice president, practice management and consulting at FCCS. “Mystery Shopping can provide that outside perspective to firms so they improve their first interactions with clients.”

The Mystery Shopping program is part of Fidelity’s Relationship Quality Framework, an overall approach to help map a client experience to the stages of a client’s journey with a firm, starting with the prospect experience.

To run the program, Fidelity hired HawkPartners and GfK, two market research firms with mystery shopping experience for various non-financial industries. The “shoppers” will be looking for misbehaviors such as:

Missing key client details during the discovery process
Touting a “personalized” experience while using an automated phone system
Excluding key associates from the sales process
Hosting a website that does not reflect the firm’s brand
Understanding potential clients’ perceptions of an office setting
Providing confusing directions to the firm’s office

Fidelity offered a testimonial from Brighton Jones, a Seattle firm that has used the program. Tyler Mayfield, the firm’s chief operating officer, called the program “an ideal research tool to uncover insights that we’ve now translated into an improved approach for initial prospect conversations.”

A new robo-advice solution from TD Ameritrade

Posted on November 3, 2016 by Editorial Staff -

TD Ameritrade has soft-launched a new digital advice offering called Essential Portfolios, which it calls “an automated, low-cost advisory service for digital-first investors.” The official national launch will occur in early 2017, said a TD Ameritrade release.

The service costs 30 basis points (0.3%) per year. Each of the five model portfolios consists of non-proprietary ETFs and cash with weighted average expense ratios of 0.06% to 0.08%. Other features and upgrades, including tax loss harvesting, will be added in coming months, the TD Ameritrade release said. There’s a $5,000 investment minimum.

Investors can assess their own risk tolerance levels, and set long-term financial goals. The algorithmic platform matches them with portfolios based on their goals, the release said. Morningstar Investment Management LLC advised on portfolio construction.

The launch follows TD Ameritrade’s June re-release of an enhanced version of Amerivest Managed Portfolios, which offers investors a “self-guided digital advice experience,” paired with “as much or as little human interaction as investors want.”

Strategic Insight buys BrightScope

Posted on November 3, 2016 by Editorial Staff -

Strategic Insight, the data and business intelligence provider for asset managers, community, has acquired BrightScope, the aggregator and evaluator of retirement plan data that was founded by Mike and Ryan Alfred in 2008, according to a release this week.

The acquisition follows Strategic Insight’s recent acquisition of Market Metrics and Matrix Solutions. “Strategic Insight is focused on being the industry’s one-stop shop for data and insights, as well as providing accelerated product delivery for its clients,” the firm’s release said.

Strategic Insight (SI) provides proprietary data, business intelligence, research and marketing services to the global asset management community, including investment flow data, advisor sales analysis, in-depth research, analytics, editorial content and events for investment managers, asset owners and custodians, plus Transaction Cost Measurement of over 500 million trades per month.

Strategic Insight, backed by Genstar Capital, delivers its products and services through four divisions: SI Data, SI Research, SI Intelligence and SI Interactive. Its editorial properties include PLANSPONSOR, PLANADVISER, Chief Investment Officer, Global Custodian, and The Trade.

FAQs (and Answers) from DOL

Posted on October 28, 2016 by Editorial Staff -

The first tranche of answers to “FAQs” about the exemptions from the Department of Labor’s “conflict of interest” rule, issued last April, was released by the DOL yesterday. It was much anticipated by executives and attorneys at brokerage firms, life insurance companies and online providers of “robo” advice.

Several questions sought clarification of the “streamlined” version of the Best Interest Contract Exemption, which “enables advisers and firms that receive only a ‘level fee’”—i.e., advisers who charge a fixed percentage of assets instead of commissions—to avoid some of the red tape and legal liability associated with signing a formal pledge to act in their clients’ best interest.

On questions asking if the advisors whose sales generated level commissions or level third-party payments could use the streamlined BIC, the DOL said no.

Regarding advisors who sign the pledge in order to accept commissions without violating the new rule, the DOL was also asked if brokerages could still use the “grid,” a compensation format that defines incentives such as bonuses for meeting production goals, and under which the percentage commissions paid to advisors may rise based on escalating sales thresholds.

The DOL said yes, but set strict limits on incentives or compensation that, by varying, might create conflicts of interest with the client—such as payments to advisors of retroactive bonuses for meeting sales volume thresholds or fixed percentages of the varying compensation that brokerages receive from mutual fund companies or insurance companies.

“If, for example, different mutual fund complexes pay different commission rates to the firm, the grid cannot pass along this conflict of interest to advisers by paying the adviser more for the higher commission funds and less for the lower commission funds (e.g., by giving the adviser a set percentage of the commission generated for the firm),” the DOL said in its answer to Question 9.

Annuities were a focus of FAQs 21, 22 and 23. The DOL re-emphasized that insurance agents must use the more rigorous Best Interest Contract Exemption if they want to sell fixed indexed annuities to IRA clients, and that insurance companies, or insurance marketing organizations that are financial institutions or act for insurance companies, must monitor their conduct for violations of the clients’ bests interests.

The FAQs offered some good news about rollover recommendations, said Seth Rosenbloom, associate general counsel for Betterment for Business, a low-cost, web-mediated 401(k) service that includes personalized investment advice for plan participants, including rollover advice.

Rosenbloom told RIJ that the answer to Question 14 explained how a rollover recommendation could proceed under the streamlined BIC even “if, despite prudent efforts, the financial institution is unable to obtain the necessary information or if the investor is unwilling to provide the [fee] information” proving that the rollover is in the client’s best interest.

Rolling Stone Jackson Ad JPG 850

Posted on October 27, 2016 by Editorial Staff -

Jackson Rolling Stone Ad 3

Rolling Stone Jackson Ad JPG

Posted on October 27, 2016 by Editorial Staff -

Rolling Stone Jackson Ad II

Rolling Stone Jackson Ad

Posted on October 27, 2016 by Editorial Staff -

Rolling Stone Jackson Ad

The Inherent Risk of High-Priced Assets

Posted on October 27, 2016 by Martin Feldstein -

Although the United States economy is in good shape—with essentially full employment and an inflation rate close to 2%—a world of uncertainty makes it worthwhile to consider what could go wrong in the year ahead. After all, if the US economy runs into serious trouble, there will be adverse consequences for Europe, Japan, and many other countries.

Economic problems could of course originate from international political events. Russia has been acting dangerously in Eastern and Central Europe. China’s pursuit of territorial claims in the East and South China Seas, and its policies in East Asia more generally, is fueling regional uncertainty. Events in Italy could precipitate a crisis in the eurozone.

But within the US, the greatest risk is a sharp decline in asset prices, which would squeeze households and firms, leading to a collapse of aggregate demand. I am not predicting that this will happen. But conditions are becoming more dangerous as asset prices rise further and further from historic norms.

Equity prices, as measured by the price-earnings ratio of the S&P 500 stocks, are now nearly 60% above their historical average. The price of the 30-year Treasury bond is so high that it implies a yield of about 2.3%; given current inflation expectations, the yield should be about twice as high. Commercial real-estate prices have been rising at a 10% annual pace for the past five years.

These inflated asset prices reflect the exceptionally easy monetary policy that has prevailed for almost a decade. In that ultra-low-interest environment, investors have been reaching for yield by bidding up the prices of equities and other investment assets. The resulting increase in household wealth helped to bring about economic recovery; but overpriced assets are fostering an increasingly risky environment.

To grasp how risky, consider this: US households now own $21 trillion of equities, so a 35% decline in equity prices to their historic average would involve a loss of more than $7.5 trillion. Pension funds and other equity investors would incur further losses. A return of real long-term bond yields to their historic level would involve a loss of about 30% for investors in 30-year bonds and proportionately smaller losses for investors in shorter-duration bonds. Because commercial real-estate investments are generally highly leveraged, even relatively small declines in prices could cause large losses for investors.

The fall in household wealth would reduce spending and cause a decline in GDP. A rough rule of thumb implies that every $100 decline in wealth leads to a $4 decline in household spending. The return of asset prices to historic levels could therefore imply a decline of $400 billion in consumer spending, equal to about 2.5% of GDP, which would start a process of mutually reinforcing declines in incomes and spending leading to an even greater cumulative impact on GDP.

Because institutional investors respond to international differences in asset prices and asset yields, the large declines in US asset prices would be mirrored by similar declines in asset prices in other developed countries. Those price declines would reduce incomes and spending in other countries, with the impact spread globally through reduced imports and exports.

I must emphasize that this process of asset-price declines and the resulting contraction of economic activity is a risk, not a prediction. It is possible that asset prices will come down gradually, implying a slowdown rather than a collapse of spending and economic activity.

But the fear of triggering a rapid decline in asset prices is one of the key reasons why the US Federal Reserve is reluctant to raise short-term interest rates more rapidly. The Fed increased the overnight rate by just 0.25% in December 2015 and is likely to add just another 25 basis points in December 2016. But that will still leave the federal funds rate at less than 1%. With the inflation rate close to 2%, the real federal funds rate would still be negative.

Market participants are watching the Fed to judge if and when the process of interest-rate normalization will begin. Historical experience implies that normalization would raise long-term interest rates by about two percentage points, precipitating substantial corrections in the prices of bonds, stocks, and commercial real estate. The Fed is therefore trying to tamp down expectations concerning future interest-rate levels, by suggesting that changes in demography and productivity trends imply lower real rates in the future.

If the Fed succeeds, the decline in asset prices may be diminished. But the danger of sharp asset-price declines that precipitate an economic downturn should not be ignored.

Eleven firms, and their new DOL-related policies

Posted on October 27, 2016 by Editorial Staff -

How 11 Brokerages, Wirehouses and Insurers Are Adapting to the DOL Fiduciary Rule

LPL. In May, the independent broker-dealer moved to standardize commissions on variable annuities at 5.5% for most contracts, and by the start of 2017, cap commissions on mutual funds at 3% to 3.5% and pay brokers a standard 0.25% trail fee. The firm will also standardize commissions for non-traded real estate investment trusts and certain insurance products.

Great American Life. In August, Great American, the third-ranked seller of fixed indexed annuities, introduced a zero-commission FIA with a living benefit rider for retirement clients of fee-based broker-dealer advisors and registered investment advisors. The Index Protector 7 offers higher caps on its point-to-point index crediting method—up to 6% compared with 3% to 4% cap on similar products.

Edward Jones. On August 17, the broker-dealer said it would stop selling mutual funds on commission to retirement investors and reduce investment minimums on fee-based accounts to make them more attractive to IRA investors.

State Farm. Starting in April 2017, State Farm will only sell and service mutual funds, variable products and tax-qualified bank deposit products through a self-directed customer call center.

Jackson National. In September, Jackson National Life, the largest seller of variable annuities in the U.S., launched its first fee-based VA, Perspective Advisory. It offers the same investments and benefit options as Jackson’s top-selling commission-based VA, Perspective II.

Nationwide. On September 26, the Columbus, Ohio-based insurer announced its purchase of Jefferson National Life, an issuer of flat-fee, no-commission variable annuities aimed at the RIA and fee-based advisor market.

Merrill Lynch. On October 6, the unit of Bank of America announced that after April 10, 2017, its IRA account owners will not be able to pay for trades on a commission basis. Their accounts will be assessed a percentage of assets. Brokers may reduce the fee ratio for those who trade but don’t need full services.

Commonwealth. On October 24, Commonwealth Financial Network said its advisors would stop offering commission-based products in IRAs and qualified retirement plans as of April 10, 2017.

Morgan Stanley. On October 26, the wirehouse announced that, in contrast to Merrill Lynch, it would keep its commission-based IRA business when the fiduciary rule takes effect next year. Its advisors will use DOL’s Best Interest Contract (BIC) exemption when charging commissions on transactions involving tax-deferred assets.

Ameriprise. On October 26, Ameriprise, like Morgan Stanley, said it would continue offering commission-based transactions on IRA accounts and use the BIC exemption, adding that it might reduce the breadth of commission-paying investment options offered to retirement investors.

Raymond James. On October 27, the broker-dealer, which has both independent advisors and employee-advisors, said it would continue offering commission-based transactions on IRA accounts and use the BIC exemption, like Ameriprise and Morgan Stanley.

Investors not applauding Genworth sale to China Oceanwide

Posted on October 27, 2016 by Editorial Staff -

China Oceanwide Holdings Group Co., Ltd., a Chinese company, has agreed to buy all of the outstanding shares of Genworth Financial for about $2.7 billion, or $5.43 per share, according to a release this week. The acquisition will be completed through Asia Pacific Global Capital Co. Ltd., a China Oceanwide’s investment platform.

Genworth shares sold for as much as $36 in mid-2007 and for less than $1 in early 2009, at the post-crash market bottom. The share price recovered to over $18 by May 2014 but fell steadily to as little as $1.70 last February.

Shareholders, who have been stewing for months over Genworth’s debt load, reacted to the deal by selling Genworth stock. The share price fell almost 4%, to $4.26, in early trading on October 27.

Beijing-based China Oceanwide is a privately held, family-owned holding company founded by Lu Zhiqiang. It has operations in financial services, energy, culture and media, and real estate assets globally, including the U.S., with about 10,000 employees.

The transaction is subject to approval by Genworth’s stockholders as well as other closing conditions, including the receipt of required regulatory approvals.

China Oceanwide will also give Genworth $600 million to settle debt maturing in 2018, on or before its maturity, and provide $525 million of cash to the U.S. life insurance businesses. This contribution is in addition to $175 million of cash previously committed by Genworth Holdings, Inc. to the U.S. life insurance businesses.

Separately, Genworth also announced preliminary charges unrelated to this transaction of $535 million to $625 million after-tax associated with long term care insurance (LTC) claim reserves and taxes.

The announcement of those intended charges, along with the acquisition by China Oceanwide as well as Genworth’s risky concentration in the uncertain long-term care insurance market, caused A.M. Best to downgrade several of Genworth’s ratings and place the company and its subsidiaries under review with “negative implications.”

Genworth needed to restructure its U.S. life insurance businesses by “unstacking” Genworth Life and Annuity Insurance Company (GLAIC) from under Genworth Life Insurance Company (GLIC) and to address its 2018 debt maturity. The $1.1 billion infusion from China Oceanwide will help it do that, the release said.

A Genworth spokesperson shed light on what “unstacking” means in this context. “Separating GLAIC from GLIC is one of the steps Genworth is taking to isolate the LTC downside risk that is pressuring its holding company and subsidiary ratings. It also will allow any future dividends from the Life and Annuity company to be paid directly to the holding company, which currently is impeded by the legal entity organization,” she told RIJ.

A.M. Best has downgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bbb” from “bbb+” and affirmed the Financial Strength Rating (FSR) of B++ (Good) of Genworth Life and Annuity Insurance Company. A.M. Best also downgraded the FSR to B (Fair) from B++ (Good) and the Long-Term ICRs to “bb+” from “bbb” of Genworth Life Insurance Company and Genworth Life Insurance Company of New York. Additionally, A.M. Best downgraded the Long-Term ICRs to “bb-” from “bb+” of Genworth Financial, Inc. and Genworth Holdings, Inc., as well as their existing Long-Term Issue Credit Ratings by two notches. A.M. Best has placed all Credit Ratings under review with negative implications.

In another development, a Louisiana law firm is investigating the Genworth sale on behalf of its shareholders to determine if the China Oceanwide’s $5.43 per share offer undervalues the company or not. The firm, Kahn Swick & Foti, includes former Louisiana attorney general Charles C. Foti, Jr.

Genworth, once part of GE Capital, would be a standalone subsidiary of China Oceanwide. Genworth’s day-to-day operations are not expected to change. Its senior management team will continue to lead the business from its Richmond, Va., headquarters. The insurer will maintain its existing businesses, including its MI businesses in Australia and Canada.

“Genworth will also continue to focus on its key operational priorities, most notably executing its multi-year LTC rate action plan, which is essential to stabilizing the financial position of the legacy LTC business. China Oceanwide has no current intention or future obligation to contribute additional capital to support Genworth’s legacy LTC business,” the release said.

The transaction, which both companies’ boards have approved, is expected to close by the middle of 2017, subject to approval by Genworth’s stockholders and closing conditions, including regulatory approvals. Goldman, Sachs & Co. and Lazard are advising Genworth. Citi and Willis Capital Markets & Advisory are advising China Oceanwide.

High stock valuations reduce insider-buying, buybacks: TrimTabs

Posted on October 27, 2016 by Editorial Staff -

The purchase by corporate executives of their own firms’ stock—aka “insider buying”—dropped to just $110 million in the first three weeks of October through Friday, according to TrimTabs’ review of Form 4 filings with the Securities and Exchange Commission.

“The best-informed market participants seem unenthusiastic about U.S. stocks at current prices,” said David Santschi, CEO at TrimTabs Investment Research. “Insider buying is running at the slowest pace for October in the past five years.”

“The pullback in buying by both insiders and companies isn’t an encouraging sign for U.S. equities,” Santschi added. “Corporate America seems to be battening down the hatches.” TrimTabs Asset Management, a sister company, offers funds that pick stocks on the basis of their liquidity, or the supply and demand for their shares, rather than their fundamental value.

In a research note, TrimTabs explained that the weakness in buying is not just seasonal. On the first 15 trading days of October, insider buying was $390 million in 2012, $360 million in 2013, $540 million in 2014, and $260 million in 2015.

Share repurchasing programs have also slowed. Stock buyback announcements fell to a nine-quarter low of $115 billion in the third quarter of 2016, and would have been much lower without Microsoft’s single $40 billion buyback. Buybacks have totaled just $8.2 billion in October, as of Friday, October 21.

TIAA survey shows popularity of closed-end funds

Posted on October 27, 2016 by Editorial Staff -

Closed-end funds can bolster the income of people who are in or near retirement and help offset today’s low-interest rate environment, according to 85% of financial advisors surveyed recently by Nuveen, a unit of TIAA Global Asset Management.

Two-thirds of advisors surveyed now use closed-end funds compared with just over half (51%) in 2013, Nuveen found in September. They do so to increase income (58%) and to diversify income (53%)

Nearly two-thirds (62%) of advisors recommend increasing closed-end fund allocation at retirement to diversify income. About one-third recommend using closed-end funds to take advantage of modest amounts of leverage and to boost returns without changing the risk composition of an investor’s portfolio.

Clients in or near retirement are extremely concerned about protecting principal (73%) and covering health-care costs (72%), about three-quarters of advisors told Nuveen. About two-thirds of advisors said that closed-end funds can increase cash flow and are appropriate for long-term investors.

Dubick & Associates conducted the survey for Nuveen last April using a sample of 326 advisors from the Discovery Database. Advisors were employed by wirehouses, regional broker/dealers, independent broker/dealers, registered investment advisors, banks and insurance companies.

A Word to the Wise Advisor

Posted on October 21, 2016 by Kerry Pechter -

In a financial world that’s shifting from commissions to fee-based compensation, how will advisory firms deal with the fact that most clients don’t like the word “fees”?

As broker-dealers scramble to adapt to the Department of Labor’s new fiduciary rule over the next six months, one challenge will be to teach thousands of advisors how to explain the effect of the new rule on, among other things, fees—a topic that increasingly concerns investors.

“There will be more conversations about fees,” Invesco Consulting’s Gary DeMoss of told hundreds of mainly sell-side executives at the Money Management Institute’s 2016 Fall Solutions conference in Boston this week. “It’s an awkward conversation to have, but your clients will want to hear it from you first.

“You must explain the ‘what’ of DOL, the ‘why’ of DOL, and how it will impact them. Make it about them and how it’s beneficial for them,” DeMoss said. He drew a ripple of laughter from the audience when he warned them not to say, “I must put now put your interests ahead of mine. Bummer.”

The MMI membership consists of asset managers, broker-dealers, TAMPs (turnkey asset management programs), and technology and solutions providers. The audience at the conference was mainly sales and marketing executives and others on the product and distribution platform side of the investment business.

Laughter was not abundant at the conference. Manufacturers and distributors of mutual funds face significant disruption by the DOL rule, as the brokerage industry shifts toward the sale of institutional share-class funds, index funds and exchange-traded funds by fee-based advisors.

Simultaneously, it is shifting away from the actively managed funds that for years have produced commissions for advisors and provide revenue-sharing dollars for broker-dealers. Broker-dealers are also expected to vastly reduce the number of fund offerings on their shelves.

In a separate presentation at the conference, A.T. Kearney predicted that the U.S. financial services industry will lose about 6.7% of its $300 billion in revenues over the next five years—much of which will come at the expense of the wealth management businesses of the four so-called wirehouses: UBS, Wells Fargo, Bank of America/Merrill Lynch and Morgan Stanley.

As one broker-dealer executive put it, “For the last several years, advisors have been moving money out of higher cost shares into institutional shares that pay less or no revenue sharing. The move to ETFs is doing the same thing. The DOL rule will only accelerate that. I think everyone agrees that eventually revenue sharing will go away—at least in its current form. The question for each firm is how will they transition to this.”

Part of that transition will involve training advisors to explain the changes to clients, most of whom don’t know how much they’re currently paying in fees. The explanation may include the news that the client is being moved from commission-based compensation to fee-based or to an automated digital advice platform.

To help companies solve this communication problem, Invesco Consulting hired Maslansky + Partners, a firm once associated with political-linguistic guru Frank Luntz. The firm studies how people understand specific words and messages. It pioneered “Live Instant Response Dial” focus groups, where participants indicate their reactions to a speech that’s in progress.

“There will be more conversations about fees and we need to be doing it the right way,” DeMoss said. It’s essential, he said, for the advisor to know exactly what and how each client is paying for services; otherwise, the advisor will look bad. Firms that try to avoid talking about the DOL are making a mistake, he added: “Anything unexplained or unexpected will be a problem down the road. Don’t leave anything out there for clients to find out about on their own.”

The word “fees” is itself problematic. During Invesco focus groups, people were asked to name the word they liked least: fees, charges, costs or commissions. “Costs” and “charges” were neutral words, with only 6% and 15% of people objecting to them, respectively. “Commissions” was liked least by 26%, but 53% of the group members liked “fees” the least.

There was some question about whether most clients know what “fee-based” compensation means. DeMoss believes that clients know that it means a percentage of assets under management and that “fee-based” never includes commissions. [“Fee-based” advisors do accept commissions, if properly licensed, according to Yahoo finance.

In Maslansky focus groups, people were also asked which type of account sounded most appealing to them. The overall answer was “flat-fee” accounts, with a 44% share of the vote. “Fee-based” came in second at 35%, followed by “advisory” accounts and “level-fee” accounts. There was a question whether clients believed that flat-fee believed that it meant a fixed dollar amount or a fixed percentage of assets.

Focus group participants were also asked which would bother them more—news that they would incur “unexpected fees” or that their portfolios had “underperformed.” By a roughly two-to-one margin, respondents said they would rather hear about underperformance than new fees. When asked whether they would rather have 8% returns and a non-attentive advisor or 6% returns and an attentive advisor, 69% chose the latter.

Going forward, advisors will need to be upbeat without raising client expectations too high. “Talk about the benefits of the DOL rule and then talk about what it is. Make it all about the client and how it will help them.” Advisors should make a habit of using the word “you” and not the word “I,” DeMoss said.

“Fear-based selling is out,” he told the audience. “So are pretty models, impressive mansions and superlatives about performance potential. Blaming the government doesn’t work. Clients don’t want to hear bashing.” Above all, simplify the process, no matter how difficult that may be. “It’s easy to make investing look hard,” he added. “It’s hard to make investing look easy.”

Data Connection

Lists*