Dynasty Financial Partners announced that the firm has named Bob Shea to a new role as Chief Investment Strategist and has also taken a new ownership stake in FCF Advisors. FCF Advisors is a boutique Asset Management firm and Index provider based in NY, specializing in free cash flow focused research and investment strategies.
In this role, Mr. Shea will lead Dynasty’s Investment Committee, provide top-down asset allocation insights and guidance and lead investment manager selection. In addition, he will construct and maintain Dynasty’s Outsourced Chief Investment Officer (OCIO) portfolios, be responsible for asset manager relationships, and participate on the investment committees of the firm’s clients.
He will report to Ed Swenson, Chief Operating Officer of Dynasty.
Dynasty’s Investment Platform reported $32.6 Billion in Assets Under Advisement (AUA) as of the end of Q2, 2022, according the firm information.
“Bob’s analytical skills and deep experience in the investment arena make him a great fit for this new role,” said Mr. Swenson. “We are thrilled to have Bob on the team and look forward to supporting him as he builds out the Investment Group’s capabilities to catalyze growth in our advisory businesses.”
Mr. Shea joins Dynasty from investment firm FCF Advisors where he was the CEO and CIO. He began his career at Goldman Sachs where he worked from 1991-2004 and where he served as Partner, Co-Head of Cash Equity Trading.
As part of the announcement Dynasty is also taking an ownership stake in FCF advisors.
Independent advisors can tap the Dynasty Investment Platform specifically for research, or to completely outsource all or part of their investment management funds through the firm’s OCIO program. The group’s analysts focus on a wide range of asset classes, including equities, fixed income/capital markets and alternative investments, the company said.
Mr. Shea joins Dynasty as the firm is preparing to host its annual Investors Forum for independent advisors in early December. The conference is one of the largest investment forums in the industry for RIAs. This year’s conference will take place in Houston, TX from December 5th– 7th. Mr. Shea will be a featured speaker along with other executives from leading investment firms.
Financial advisor Jim Martin and a team of four professionals launched a new multi-family office and investment firm called Nordwand Capital in Radnor, PA with a presence in New York, NY and Boston, MA.
Nordwand Capital is a multi-family office and investment firm serving select families with whom the team has worked for many years. With approximately $5 billion in client assets, “the firm cultivates a prudent long-term investment philosophy that prioritizes performance across asset classes”, the release said. Nordwand is focused on generational continuity, philanthropy, and service as core tenets of investing and client service.
In addition to being a Registered Investment Advisor, the firm has established Nordwand Investments, LLC as an independent entity designed to facilitate co-investment opportunities with some of the world’s most sophisticated investors in a fully aligned manner and with favorable economic structures.
Nordwand Investments will be the GP of several listed and private investment funds and opportunistic Special Purpose Vehicles and has received in excess of $250 million in seed capital for its first three funds from its founding family partners.
“We needed to meet the needs of 21st-century ultra-wealthy clients. which requires creativity and flexibility,” said Mr. Martin. “In response, we launched Nordwand Capital as a fully independent firm that is nimble and responsive enough to seize investment opportunities as they arise. Our new firm offers flexibility, speed, and creative structuring, giving our clients more attractive investment options.”
“It’s clear the team made this decision because it’s in the best interest of their clients,” said Shirl Penney, CEO of Dynasty Financial Partners. “This is one of the largest fully independent firms launching in 2022 and it shows the continuation of the trend of the most successful financial advisors and investment professionals moving toward full independence. We are delighted to welcome Jim and the whole Nordwand team to the Dynasty Network.”
Nordwand Capital has selected Fidelity Brokerage Services LLC as its custodian. Fidelity Institutional® (FI) provides clearing, custody, or other brokerage services through National Financial Services LLC or Fidelity Brokerage Services LLC, Members NYSE, SIPC. Fidelity Family Office Services is a division of Fidelity Brokerage Services LLC.
Jim Martin joins Nordwand Capital as Chief Executive Officer and Chief Investment Officer. He was most recently a Managing Director at Morgan Stanley Private Wealth Management, which he joined in 2016 from Credit Suisse’s private-banking division. He has been recognized nationally by Barron’s as a Top 100 Advisor in 2021 and 2022*. Earlier, Jim was a founding member of Donaldson, Lufkin & Jenrette’s Philadelphia office. Mr. Martin maintains his Series 7 and 66 certifications. He received a B.S. in Finance from St. Joseph’s University.
Joining Jim Martin are the following professionals: Christopher Boyle,Chief Operating Officer, Theodore W. Brooks, CFA, Head of Listed Strategies, Connor Martin, Senior Associate, Daniel Kane, Senior Associate.
As volatile as U.S. stock and bond markets have been this year, emerging markets (EM) have had it worse. EM stocks are currently in one of their longest bear markets, with the MSCI Emerging Markets Index down about 40% from its February 2021 peak.
The cause of this poor performance has a lot to do with China and its regulatory crackdowns on its global technology franchises, restrictions on debt restructuring among homebuilders and zero-COVID policy, which has produced rolling lockdowns and interrupted economic momentum.
Together, these have produced disappointing growth. And because China is a major trading partner to virtually all other EM regions, and accounts for one-third of the market capitalization in most EM benchmark indices, its fate weighs heavily on investor willingness to allocate to EM.
Global inflation in oil and food prices and the strong U.S. dollar have further dragged on the markets. The strong dollar raises the cost of dollar-denominated debt and imports for emerging markets.
Together, these challenges have led global investors to slash EM positions and shun the asset class, driving historically cheap valuations. The MSCI EM Index now trades at about 10 times forward earnings estimates, and the MSCI China Index about eight times.
This is in marked contrast to the S&P 500 Index, which still boasts a forward price-to-earnings ratio of 17 and is over-owned by investors globally.
Three Potential Catalysts for a Rebound
A more pro-growth, stimulus-oriented stance in China: Morgan Stanley economists believe China will begin prioritizing economic development over some of its goals related to security and social stability, which have been front and center for the past two years. We also see a possible end to China’s zero-COVID policy by the new fiscal year in April 2023. A full re-opening could allow private consumption to rebound substantially and boost China’s inflation-adjusted GDP growth from below 3% to 4.5% in 2023. Importantly, as China pursued a very different policy response to COVID from most of the West, it is not experiencing high inflation or rising interest rates. This gives Beijing significant runway for stimulus.
A peak in the strength of the U.S. dollar: We may see the dollar losing momentum as the Federal Reserve’s rate-hiking cycle matures and as relative economic growth outside of the U.S. improves. As the dollar potentially weakens, EM countries could benefit from the relative appreciation of their own currency. Additionally, commodity exporters, such as countries in Latin America, could see commodity prices strengthening due to greater global demand.
Shifting global trade relationships: While U.S.-China relations remain complicated, the reorganization of strategic supply chains could create new opportunities for EM nations other than China. In areas such as consumer and industrial goods, we anticipate new relationships between the U.S. and India, Latin America and non-China-linked countries in Southeast Asia. Meanwhile, we also expect China to continue to court economic integration with some of those same countries, extending efforts first nurtured through its Belt and Road infrastructure program.
All in, we think it may be time for investors to reassess their exposure to emerging markets. Investors should consider rebalancing EM exposure with an eye toward China onshore companies, as well as opportunities in South Korea, Taiwan and Brazil.
UBS launched a new offering, in collaboration with Addepar and Mirador, that will provide UBS’s ultra high net worth clientsin the US with a consolidated, real-time view of their entire portfolio across assets and liabilities, including traditional, non-traditional and illiquid assets.
UBS’s financial advisors will now have access to comprehensive analytics, which will help them more effectively visualize their clients’ investment performance, cash flows, and worth, while assessing the opportunities and risks across their portfolios.
“We recognize that our advisors need an intuitive, visual and modern offering that will provide a complete picture of their clients’ full portfolio – from stocks and bonds to alternative investments and their private art collections,” said John Mathews, Head of Private Wealth Management at UBS. “With this unique offering, our clients will have the ability to gain a deeper understanding of their wealth – guided by their financial advisor – to help them make more informed decisions to meet their financial goals.”
Built with open architecture, Addepar integrates the leading-edge software, data and service partners from across the fintech industry. Addepar’s data, analysis and reporting capabilities will help UBS’s advisors consolidate clients’ performance calculations presented in an easily accessible graphic interface to unlock additional insights on returns and investment trends.
“Our partnership redefines what’s possible for advisors and their clients and truly empowers data-driven investment decisions in a timely, complete and secure way,” said Eric Poirier, CEO, Addepar. “Working with UBS, it’s clear that they recognize the importance of having the best technology, data and solutions to meet their clients’ needs – now and in the future.”
As part of the Addepar partner ecosystem, Mirador’s financial data technology experts will support UBS’s advisors with data management, custom visualization and tailored reporting, as well as operations and system maintenance.
“We are thrilled to have UBS as our first enterprise-wide client,” said Jeremy Langlois, Chief Revenue Officer, Mirador. “We look forward to working with the firm’s advisors to provide tailored solutions to help their clients understand their needs and unique ownership, family and legal entity structures to achieve their financial goals.”
“Expert” investors are more likely to believe that investing sustainably is key to driving long-term returns compared with people who rate themselves as less knowledgeable, Schroders Global Investor Study 2022 has found.
The sustainability-focused findings of Schroders’ flagship study, which has surveyed more than 23,000 people who invest from 33 locations globally, found that more than two-thirds (68%) of people who class themselves as having “expert/advanced” investment knowledge believe sustainable investment is the only way to ensure profitability in the long term.
This compares with 52% of ‘”intermediate” investors and 43% of those who believe they have ‘”beginner/rudimentary” investment knowledge. Similarly, 69% of “expert” investors share the view that investing sustainably can support positive change when it comes to challenges such as climate change.
Hannah Simons, Head of Sustainability Strategy at Schroders, commented: “The interaction between sustainability and returns has seen some polarising results this year. While beginner investors appear more sceptical, the majority of people believe sustainability is crucial to delivering long-term returns. This is encouraging to see and further emphasises the crucial role asset managers have to play in terms of helping investors better understand how investing sustainably can not only help overcome challenges such as climate change, but also support their long-term returns. Indeed, we see an intrinsic link between long-term sustainable investment returns and solving some of the world’s social and environmental challenges.”
Specifically, the study found that environmental impact was the main reason people are attracted to sustainable investing. However, investing according to social issues has grown in importance compared with previous years. Interestingly, financial gains only ranked third in investors’ list of priorities, having declined over the past two years, falling from 42% in 2020 to 36% this year.
However, a focus on delivering financial returns unsurprisingly still remains a priority for many investors. More than half (56%) seek a fund that focuses primarily on delivering financial returns while integrating sustainability factors. That is particularly the case for people in Asia (61%) and the Americas (60%), while people in Europe were more likely to choose a fund with sustainability characteristics (51%).
The study also found that people would increasingly invest in sustainable funds if they were able to invest in line with their preferences. More than half of investors across all self-defined expertise levels said that the ability to choose investments that align with their personal sustainability preferences would encourage them to increase their allocation to sustainable investments.
In terms of investors’ specific sustainability goals, quality education was seen as the most important globally, with a fifth of those surveyed (21%) ranking this option first.
Education and evidence of better performance and impact also key factors to encourage sustainable investment
Countries with higher poverty levels appeared to prioritise addressing poverty over other factors. In India, eliminating poverty was the top priority (having been selected by 21% of investors). In contrast, investors in Switzerland selected educational improvements as the priority.
As well as the ability to choose investments aligned to their personal sustainability preferences, just under half (48%) said that more education around sustainable investing would encourage them to allocate more sustainably. The lack of clear definitions of sustainable investments was cited as one of the most significant barriers to investing sustainably by all knowledge levels.
Completing the top three, some 44% of people stated that more data and evidence showing that investing sustainably delivers better returns would encourage them to increase their investments.
Andy Howard, Global Head of Sustainable Investment at Schroders, said: “This year’s survey results show that environmental challenges remain one of the key reasons individuals are looking to invest sustainably. However, the ‘S’ in ‘ESG’ can’t be forgotten, with human capital, education and equality all top of people’s investment priorities. Financial education is a key element in driving more capital towards sustainable investing. It is clear from our research that what people seek is essentially guidance and clarity. The more people are able to understand the products they invest in and their impact on society and the environment, the more capital we should see flowing into sustainable investing.”
Insigneo and iCapital announced a partnership to provide Insigneo’s US and Latin American financial advisors and their clients with access to iCapital’s private market and hedge fund offerings.
“We recognize the growing importance of alternative investments, especially in today’s market environment,” said Insigneo Chairman and CEO Raul Henriquez. “To that end, Insigneo is proud to partner with iCapital, which enables us to leverage their technological capabilities to provide Insigneo’s clients with easy access to a premiere lineup of alternative investing opportunities.”
Added Mirko Joldzic, Insigneo’s Head of Investment Solutions: “We are excited that our global client base will greatly benefit from iCapital’s technology and solutions while accessing a broad range of private market opportunities within private equity, private debt, and real assets, in addition to a variety of hedge fund strategies.”
iCapital and Insigneo both recognize a growing demand for private market and hedge fund investments in Latam.
“We are pleased to announce our partnership with Insigneo, a distinguished wealth management firm with a primary focus on Latin America, and support them in our shared mission to make institutional-quality private market and hedge fund allocations more accessible to financial advisors and their clients,” says Marco Bizzozero, Head of International at iCapital. “Latin America is of strategic importance to iCapital, and we are delighted to grow our business in the region with such an experienced partner.”
Latin America (LatAm) and the Caribbean are the most susceptible regions to a US recession, Fitch Ratings says in a new report. This reflects LatAm and the Caribbean’s geographical proximity and various transmission channels, which tie them to US economic cycles and policy decisions.
Fitch cut its US 2023 growth forecast to 0.5% in its most recent Global Economic Outlook published September 2022; it forecasts a mild US recession beginning in 2Q23.
The main transmission channels into LatAm and the Caribbean are trade, remittances, tourism and commodity prices. Within these regions, the countries’ different economic characteristics mean the impact could vary considerably.
Lower US external demand primarily affects Mexico due to its export-dependence and geographical proximity (Mexico is among the US’s top three trading partners).
A large portion of Central American exports are demanded by the US, although these countries tend to have a more diverse export markets base.
South American economies have limited trade links with the US, but are indirectly affected via the impact on global trade and commodity prices.
Weakening US household incomes and employment could imperil migrants’ capacity to send remittances home, and discourage tourism.
Remittances account for more than 20% of GDP for some Central American countries. Caribbean and Central American economies are vulnerable to a sudden stop in tourist arrivals, particularly Aruba (the world’s most tourist-dependent country as a share of GDP).
A US recession, in tandem with Fed tightening, adds to challenges for frontier markets, as costlier external financing could complicate policy options, and for the region’s more developed economies if their current account deficits are large.
We expect limited pressure on LatAm and Caribbean’s sovereign ratings from a mild US recession. Any ratings impact will ultimately depend on the magnitude of the US economic shock and each country’s capacity to absorb it.
‘Latin America and the Caribbean’s Vulnerabilities to a US Recession’ is available at www.fitchratings.com or by clicking on the link above.
Ahmed Riesgo, Chief Investement Officer at Insigneo
Florida Governor Ron DeSantis was one of the night’s biggest winners in the U.S. midterm elections, commented Insigneo’s chief investment officer, Ahmed Riesgo.
The expert explained how DeSantis “outperformed expectations in largely Democratic strongholds like Miami-Dade and Palm Beach Counties”.
In addition, the governor, who was re-elected, polled well among Latin community.
Several political analysts noted how DeSantis was very well positioned for the 2024 presidential race. Riesgo agrees with this view.
“He should be considered the frontrunner for the Republican party Presidential nomination as of today,” he added.
On the other hand, the Insigneo expert, highlight that President Joe Biden is another big winner of the night because although he will lose weight in the House of Representatives, that defeat will be better than what is customary for presidents to suffer.
Riesgo remembered that Presidents and Congressional majorities almost always get flipped in the midterms. “Historically, the Democrats lost this election back in November 2020 when they were first elected,” he commented.
According to the analyst, Democrats “did an above average job of minimizing losses, especially considering the poor macro environment they faced and how many respondents during exit polls claimed that the country was headed in the wrong direction”.
On the other hand, the “red wave” that some pundits claimed was swelling in recent weeks did not hit the beach on Tuesday. Instead, we got merely a “red ripple”.
In that sense, “a divided government is obviously still the base case, but the small Republican majority in the House and the slim majority of either party controlling the Senate means that the debt ceiling will be a major issue for the markets to deal with in 2023,” he commented.
With this scenario, “both parties will have enough opposition critical mass (i.e., scapegoats) to blame the other side for not agreeing on a budget. ” he concluded.
In volatile markets, investors, particularly those experiencing it for the first time, look to their advisors for guidance. Advisors can seize upon this opportunity to engage existing clients and gain new ones by offering financial planning services, using effective communication strategies, and implementing financial planning software, according to the latest Cerulli Edge—U.S. Asset and Wealth Management Edition.
Nearly 75% of advisors’ clients receive some form of financial planning, a share that is expected to rise to 82% by 2023. 18% of investors working with a financial advisor do not have a financial plan in place but consider it important. Cerulli recommends advisors consider re-introducing their planning services to those who may not be aware of this service offering, particularly during periods of market volatility.
In addition to financial planning services, advisors should consider developing a communication strategy to attract and retain advisory relationships. Close to 40% of retail investors consider it extremely important that their advisor maintains an appropriate amount of contact with them.
Advisors can implement this by distributing timely information about the current market and economic situation and offering their own analysis, which clients are likely to share with their own personal networks. “A thoughtful stream of touchpoints can buoy client satisfaction even as markets falter, allowing advisors to be best positioned for client retention and growth,” says Scott Smith, director.
As firms continue to encourage financial planning, scale becomes an important consideration. “Well-integrated financial planning solutions can help advisors meet investor demand for bespoke planning services efficiently, which can prove invaluable, especially in times of market volatility,” says Smith. According to the research, 74% of advisors use financial planning software within their practice, and by 2023 this percentage is expected to reach 82% among firms polled.
Ultimately, according to the research, advisors who offer financial planning find that their clients are better positioned to stay the course and remain calm despite declining market performance while enabling advisors to develop enduring client relationships.
“Financial planning shifts the focus to progress made toward achieving goals rather than investment performance,” says Smith. “This frames volatility in the context of a bigger picture, which helps clients feel prepared when market shocks arise.”
Bank of America announced Premium Access Strategies, a suite of third-party investment strategies reviewed by the Chief Investment Office, including the added benefits of access to investment management teams and the ability to request expanded portfolio customization.
The new strategies are fully integrated into Merrill Lynch Investment Advisory Program to help support comprehensive planning discussions, as well as seamless implementation and inclusion in annual review materials.
“Premium Access Strategies is the latest example of Merrill offering personalized investments to align with clients’ goals and financial situations,” said Keith Glenfield, head of Investment Solutions at Bank of America. “The new offering is designed to address clients’ unique needs and provide further customization, all while being fully integrated into the Merrill Lynch One Platform.”
Premium Access Strategies allow clients to enter into a dual contract relationship by signing an agreement with Merrill and entering into an investment manager agreement with the selected manager, who can provide customized, professional investment management for a personalized portfolio at a negotiated manager rate. Managers planned to be available for the November launch, include AllianceBernstein, BlackRock, Franklin Templeton, Lord Abbett, Natixis Investment Managers/Loomis Sayles, Nuveen and PIMCO.
Premium Access strategies will address the unique needs of eligible clients by offering the ability to request enhanced portfolio customization to help clients’ investments align with their needs and goals; a relationship where clients can connect with the investment manager to discuss investments and receive reporting directly from the manager and portfolios governed by a separate agreement, directly with the investment manager with negotiable terms, including investment management fees.
This is the latest example of Merrill’s growing suite of products and solutions tailored to the needs of high-net-worth clients, a growing client segment.
The new offering is designed for clients with at least $5 million in combined assets at Merrill and Bank of America or at least $10 million in investable assets, including assets outside of Merrill and Bank of America.
