BNY Mellon announced that its Digital Asset Custody platform is live in the U.S. With clients now able to hold and transfer bitcoin and ether, this milestone reinforces BNY Mellon’s commitment to support client demand for a trusted provider of both traditional and digital asset servicing, the press release says.
BNY Mellon formed an enterprise Digital Assets Unit in 2021 to develop solutions for digital asset technology, with plans to launch the industry’s first multi-asset platform that bridges digital and traditional asset custody.
“Touching more than 20% of the world’s investable assets, BNY Mellon has the scale to reimagine financial markets through blockchain technology and digital assets,” said Robin Vince, Chief Executive Officer and President at BNY Mellon. “We are excited to help drive the financial industry forward as we begin the next chapter in our innovation journey.”
A recent survey sponsored by BNY Mellon highlights already significant institutional demand for a resilient, scalable financial infrastructure built to accommodate both traditional and digital assets. According to the survey, almost all institutional investors (91%) are interested in investing in tokenized products. Additionally, 41% of institutional investors hold cryptocurrency in their portfolio today, with an additional 15% planning to hold digital assets in their portfolios within the next two to five years.
“With Digital Asset Custody, we continue our journey of trust and innovation into the evolving digital assets space, while embracing leading technology and collaborating with fintechs,” said Roman Regelman, CEO of Securities Services & Digital at BNY Mellon.
BNY Mellon has been working closely with market-leading fintechs. The firm tapped digital asset technology specialists Fireblocks and Chainalysis to integrate their technology in order to meet the present and future security and compliance needs of clients across the digital asset space.
“As the world’s largest custodian, BNY Mellon is the natural provider to create a safe and secure Digital Asset Custody Platform for institutional clients,” said Caroline Butler, CEO of Custody Services at BNY Mellon. “We will continue to innovate, embrace new technology and work closely with clients to address their evolving needs.”
More advisor practices are adopting the use of model portfolios to help advisors better serve clients and develop their business, according the latest Cerulli Edge—U.S. Advisor Edition.
When used appropriately, model portfolios can be an effective tool that can free up time advisor practices spend on portfolio management, allowing them to reallocate that time toward other highly valuable functions, not the least of which includes the delivery of financial planning services and asset gathering.
Cerulli expects that the industry’s slow and steady transition toward a financial planning-oriented service model will be a powerful impetus for the adoption of model portfolios.
Among advisor practices, insourcers—those who either customize portfolios on a client-by-client basis or use practice-level resources to build a series of custom models—spend 18.5% (practice models) and 29.5% (customizer) of their time focused on investment management. Model portfolio use allows advisors to reduce that time commitment to less than 10%.
“This saved time can be put toward client-facing activities, a particularly important activity, for example, for younger advisors that are focused on asset gathering and building a book of business,” says Brad Bruenell, associate analyst.
The way in which model portfolios can fit into an advisor’s practice varies significantly, depending upon the individual circumstances of each advisor and their practice. For example, for younger advisors focused on building a book of business, model portfolios can be an effective tool to maximize the available time to spend on asset gathering. For larger, more experienced advisory practices, model portfolios can be an effective way to efficiently service younger, less affluent clients, such as the future expected inheritors of an advisors’ wealthier clients, enabling advisors to serve the financial needs of multiple generations of a family.
“The effective use of model portfolios can increase advisor efficiencies and service offerings in both maturing and fully mature practices, in a variety of ways depending upon the preference of the practice,” says Bruenell. “We anticipate this trend will continue to gain traction among advisors in the future as they seek to improve their scale and service differentiation,” he concludes.
The IMF projects global growth is slowing under the burden of high inflation, impact of Russia’s war in Ukraine and lingering effects of pandemic announced Pierre-Olivier Gourinchas, the IMF’s Chief Economist.
The Fund expects global growth to remain unchanged in 2022 at 3.2% and to slow to 2.7% in 2023—0.2 percentage points lower than the July forecast—with a 25 percent probability that it could fall below 2 percent.
“The global economy is weakening further and facing a historically fragile environment. The outlook continues to be shaped by three forces. Persistent and broadening inflation, causing a cost-of-living crisis, the Russian invasion of Ukraine and the associated energy crisis, and the economic slowdown in China,” said Gourinchas.
Downside risks remain elevated, while policy trade-offs to address the cost-of-living crisis have become acutely challenging. The risk of monetary, fiscal, or financial policy miscalibration has risen sharply at a time when the world economy remains historically fragile and financial markets are showing signs of stress.
“Unfortunately, most risks to the outlook are to the downside. There’s a risk of monetary policy, miscalibration at a time of high uncertainty and fragility. In particular, we are concerned that central banks will ease too early, causing inflation to remain excessively high and requiring a much larger loss of output later. A persistently strong dollar could fuel inflation and amplify financial tightening, especially in emerging market and developing economies. High post-pandemic debts and higher borrowing costs could cause widespread debt distress in low-income countries. A deeper real estate crisis in China could cause severe financial stress. The war could further destabilize energy markets. A resurgence of the pandemic would hit under-vaccinated regions hard, especially Africa. Lastly, further geopolitical fragmentation could hamper global policy coordination and trade,” added Gourinchas.
Persistent and broadening inflation pressures have triggered a rapid and synchronized tightening of monetary conditions, alongside a powerful appreciation of the US dollar against most other currencies. Tighter global monetary and financial conditions will work their way through the economy, weighing demand down and helping to gradually subjugate inflation.
“The biggest fight now is the fight against inflation,” warned Gourinchas. The Chief Economist added that the central banks are laser focused and they need to keep a steady hand and growth will slow in 2023 as conditions tighten and some financial fragilities may emerge.
“But the main priority should be to restore price stability. This is the bedrock of future economic prosperity. Next, fiscal policy needs to be guided by coherent economic principles. First, pandemic era stimulus should be withdrawn, and buffers rebuilt. Second, fiscal policy should not work at cross-purposes with monetary policy. Third, the energy crisis will be long lasting. Solving it requires supply to increase and demand to decrease,” explained.
Price signals will be important to achieve that. Governments should provide direct, temporary and targeted help to low- and middle-income families. Finally, many countries are struggling with the strength of the dollar. Yet this reflects mostly the speed of the tightening cycle in the United States, as well as the energy crisis. Unless financial markets become severely disrupted, monetary policy should focus on inflation while allowing the exchange rate to adjust to underlying economic forces, alerted Gourinchas.
The SEC has voted to adopt amendments to the electronic recordkeeping, prompt production of records, and third-party recordkeeping service requirements applicable to broker-dealers, security-based swap dealers (SBSDs), and major security-based swap participants (MSBSPs).
The amendments are designed to modernize recordkeeping requirements given technological changes over the last two decades and to make the rule adaptable to new technologies in electronic recordkeeping. The amendments will also facilitate examinations of broker-dealers, SBSDs, and MSBSPs, the release said.
“I am pleased to support these rule amendments because they will bring the Commission’s electronic recordkeeping requirements for intermediaries such as broker-dealers and security-based swap dealers in line with technological innovation,” said SEC Chair Gary Gensler.
The SEC’s broker-dealer electronic recordkeeping rule currently requires firms to preserve electronic records exclusively in a non-rewriteable, non-erasable format, known as the write once, read many format. The amendments add an audit-trail alternative under which electronic records can be preserved in a manner that permits the recreation of an original record if it is altered, over-written, or erased.
The audit-trail alternative is designed to provide broker-dealers with greater flexibility in configuring their electronic recordkeeping systems so they more closely align with current electronic recordkeeping practices while also protecting the authenticity and reliability of original records. The amendments apply the same requirements to nonbank SBSDs and MSBSPs, the SEC added.
Among other things, to facilitate examinations and make them more efficient, the amendments also require broker-dealers and all types of SBSDs and MSBSPs to produce electronic records to securities regulators in a reasonably usable electronic format.
The adopting release will be published on SEC’s web siteand in the Federal Register. The final amendments will become effective 60 days after publication in the Federal Register. The compliance dates for the new requirements will be six months after publication in the Federal Register in the case of broker-dealers and 12 months after publication in the Federal Register in the case of SBSDs and MSBSPs.
Thomas G. Johnston, Head US Offshore at John Hancock IM
John Hancock Investment Management appoints Thomas G. Johnston as the new head of US Offshore distribution funds in Miami.
Johnston has twenty years of industry experience in Miami, where he has worked for several well-known fund managers.
He began at MFS Investment Management between 2002 and 2003 and then he moved to SunLife Financial International where he spent nearly eight years, according to his LinkedIn profile.
In 2014 he became part of Amundi, where he fulfilled functions both in New York and Miami until December 2020.
After that, he joined LarrainVial, where he worked until this month when he was announced at John Hancock Investment Management.
“I’m happy to share that I’m starting a new position as Managing Director, Offshore Funds (UCITS) Distribution at John Hancock Investment Management,” posted on LinkedIn.
Johnston is bachelor in art and international affairs from Suffolk University in Madrid. He also holds a bachelor’s degree in International Relations and Spanish from the same institution.
August data shows renters are feeling the strain of higher costs, as Americans spent more than one-quarter (26.4%) of their monthly budgets on rents in August, on average, according to the Realtor Monthly Rental Report.
Among the 50 largest U.S. metros, coastal areas topped August’s list of least affordable rental markets, with rents accounting for the highest shares of household incomes in Miami (46.5%), Los Angeles (40.7%) and San Diego (37.1%).
“Our analysis underscores the very real rental affordability challenges that many Americans face today. Rents are significantly higher than in previous years and are taking up a substantial portion of incomes, which are growing at a slower pace than inflation,” said Realtor Chief Economist Danielle Hale.
Hale added: “Still, there are some bright spots for renters as of late. Based on the general rule of thumb that you should keep housing costs to under 30% of your paycheck, renters were able to follow best practice in the majority of large metros in August. Plus, as rent growth continued to cool, national rents didn’t hit a new record-high for the first time in nine months. If these trends and typical seasonal cooling persist, renters may be better able to keep housing costs to a relatively manageable portion of their budgets in the months ahead.”
Hale explained that the U.S. median rental price declined for the first time since November 2021 in August, to $1,771 from $1,781 in July.
Additionally, rent growth continued moderating on a year-over-year basis, down to a single-digit increase (+9.8%) after 13 straight months at a double-digit pace.
However, national rents remained more than 20% higher than in August 2020 overall (+22.8%) and across all unit sizes: Studios at a median $1,489 (+21.2%), one-beds at a median $1,653 (22.6%), and two-beds at a median $1,964 (+23.2%).
Despite the cooldown in annual rent growth, August data indicates that rental affordability issues are rising. Nationally, rents accounted for a higher share of renters’ incomes in August compared to last year (26.4% vs. 25.7%, on average).
Julius Baer has announced several appointments in Brazil and a new team of relationship managers to strengthen the Mexico office in Zurich. In addition, the Swiss bank hired four executives from BBVA, professionals with experience in Itaú Private Bank, BNP Paribas and XP Investimentos.
The following appointments are for its local operations in sub-region Brazil:
Lucas Rizzi joins in October as Chief Operations and Chief Technology Officer. Lucas joins Julius Baer from Itaú Private Bank where he was Head Customer Digital Experience.
Greice Rabelo joined Julius Baer in September as Senior Relationship Manager. Greice joined from BNP Paribas where she was Head Private Bank Belo Horizonte.
Antonio Monteiro, previously responsible for Single and Multi-Family Offices at ASA Investments, joined in September as Senior Relationship Manager.
Laura Drummond Correa joins in October as Relationship Manager. She was previously at XP Investimentos.
Kevin Liu joins Julius Baer in October as Relationship Manager. He previously worked at Messem Investimentos.
“Brazil continues to offer excellent growth opportunities and the Bank’s local business has been expanding and growing successfully since its first acquisition in Brazil in 2011. A strengthened leadership team encompassing all our business activities in Brazil was announced in March this year”, the firm said.
Hires in sub-region Mexico and Hispanic Americas
In sub-region Mexico and Hispanic Americas, a new team of Relationship Managers joins Julius Baer in October to strengthen the Mexico Desk in Zurich:
Miguel Caballero joins Julius Baer as Team Head, reporting to Marc Furler, Market Head Mexico. Miguel was formerly Team Leader Mexican Desk at BBVA.
Martín Giménez Pina joins Julius Baer as Senior Relationship Manager. He was previously a Senior Relationship Manager at BBVA covering Mexico and other markets in South America.
Carlos Fernández joins Julius Baer as Relationship Manager and was previously at BBVA.
Fernando Caro Sierra joins as Assistant Relationship Manager from BBVA where he was an Account Manager.
To support the local business, Senior Relationship Manager James Armstrong relocated to Uruguay from Zurich, and Virginia Meharu was hired as Assistant Relationship Manager.
Sub-region Mexico and Hispanic Americas is part of Region Americas and includes Mexico, Chile, Argentina, Peru, and Colombia among other markets.
Beatriz Sanchez, Head Region Americas, commented: “These appointments are a further step towards expanding and growing the business successfully in the Americas. They also underscore our commitment to continuously invest in the advancement of the different teams in our diverse Region. I very much look forward to further developing our existing client base with the support of these numerous and valuable additions.”
Photo courtesyDavid Norris, Head of US Credit de TwentyFour AM
TwentyFour, Vontobel’s boutique, will present the virtues of fixed income to stop being conceptualized as a defensive measure in 2023 during its conference at the VIII Society of Funds Investment Summit.
During the event, which runs from October 5-7, David Norris, Head of U.S. Credit at TwentyFour AM, “will discuss the attractiveness of fixed income and how investors might not need to embrace the full volatility of equity markets to experience strong returns.”
The presentation “Late Cycle Investing and the Value Fixed Income” will discuss that with wide spreads and interest rates likely to stabilize in 2023, “the role of fixed income has the opportunity to shift from what has historically been viewed as a more defensive position, to a better option for those seeking less volatility and better predictability.”
“With yields high and the historical profile of bonds being that of a lower volatility instrument, investors are being presented with an attractive point of entry and an alternative to traditional equities as we wait for this phase of the economic cycle to play out,” the firm says.
David Norris
David joined TwentyFour in September 2018. Based in the New York office, he serves as the Head of US Credit as well as one of the portfolio managers of the Strategic Income Team. He is a credit specialist with 30 years’ experience in fixed income markets gained across a variety of senior roles in asset management and investment banking in London, Frankfurt and New York.
Photo courtesyDirector of Client Portfolio Management and Business Development Group at Thornburg Investment Management
Quality multinational companies are the focus of the strategy to be presented by Thornburg IM at the VIII Funds Society Investment Summit.
“Stock dividends have been critical to the total return on global equities. We actively target strong companies with both the ability and willingness to grow profits and pay dividends over time”, according the asset management information.
The Thornburg lecture during the event, to be held October 5-7 at the PGA National Resort in Palm Beach, will be given by Michael Ordonez, Director of the Client Portfolio Management and Business Development Group.
Companies with wide moats, business advantages, and healthy balance sheets can help investors hedge against inflation, as their leadership allows them to increase prices when necessary. With such well-managed companies, many of which are outside the U.S., dividends are often accompanied by capital appreciation in the long term, the firm says.
If you are a professional investor and want to register for the event, enter the following link.
Michael Ordonez
Director of Client Portfolio Management and Business Development Group at Thornburg Investment Management. In this role, Michael heads a team of client portfolio managers responsible for the external-facing articulation of investment philosophy, process, performance and positioning to clients across all channels.
Additionally, he manages the business development group, which is responsible for helping the firm acquire and retain assets under management by meeting a variety of information needs for prospective and current clients. Michael also maintains direct client portfolio management coverage of Thornburg’s global fixed income and global equity strategies.
Before joining Thornburg in 2019, Michael served as a vice president for Société Générale in their multi-asset product group. Prior to that he worked at Citigroup for 10 years in a number of roles, including investor relations, equity research sales and investment banking. He started his career at Lehman Brothers. Michael holds a BA in Latin American studies and sociology from Dartmouth College. He is currently registered with FINRA with a Series 7 and 63.
Bahamas-based crypto exchange FTX is moving its U.S. headquarters to Miami, only four months after cutting the ribbon on its headquarters in Chicago.
“Really grateful to work with Zach Dexter, Ryne Miller, and others to push forward in the US; and a heartfelt goodbye to Brett Harrison as he transitions to an advisor and FTX US transitions to its Miami HQ!,” CEO Sam Bankman-Fried announced the Miami move in a tweet.
When speaking with Bloomberg about the move, FTX CEO Sam Bankman-Fried said that establishing offices all over the world was key to the company’s mission of getting licensure for its various businesses.
FTX moved its global headquarters from Hong Kong to the Bahamas in September.
“Frankly, for us, having clear licensure for our marketplaces is by far the biggest piece of this, that’s what we’ve been focusing on,” Bankman-Fried said.
Miami has become a hot spot for crypto companies in the U.S., second only to New York in terms of cities with the most investments in crypto startups.
Several companies, including crypto exchange Blockchain.com and now FTX.US, have moved their headquarters to Miami. Others, including fellow exchange eToro, have expanded their U.S. presence with offices in the city.
Last March, FTX.US purchased the naming rights to the Miami Heat arena for $135 million.
