Just 19% of Investors Use Their Parents’ Advisor

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Just one in five affluent investors use the same advisor as their parents, according to the latest Cerulli Edge—U.S. Retail Investor Edition.

Advisors must reinforce the value of their services to clients both early in the relationship and in times of unique difficulty to strengthen and retain relationships for the long term.

Maintaining a relationship across generational divides is a ‘win-win’ for both investors and the advisory firm itself—young investors receive the benefits of an advisor who already is familiar with the family’s financial situation, and the advisor has a chance to preserve the account for the next generation.

Despite the benefits, Cerulli’s research shows more than 90% of affluent investors who use their own advisor did not consider their parents’ advisor in their selection process, and just 6% gave their parents’ advisor even the slightest consideration. The increasingly mobile nature of the younger demographic means they are more likely to switch advisors, unless the firm itself really gets to know them and their financial needs.

“While they may begin as a sort of ‘marriage of convenience,’ advisors can create long-lasting relationships with their clients’ children,” says research analyst John McKenna. “Advisors whose clients have financially interested children should work with them—either helping them with their own financial plans or directing someone else within the firm whose life experiences align with these clients to join the advising team,” he adds.

For parents, having family-level conversations can smooth out potential future trouble spots in terms of inheritance or financial support, should misfortune befall either generation.

“More than ever, involvement in financial discussions for wealth planning is becoming a ‘need to have’ rather than a ‘nice to have,’ and with an increasingly affluent Millennial demographic, advisors cannot afford to squander such business-expanding opportunities,” concludes McKenna.

Schroders Capital Reaches $1.5bn Private Equity Secondaries

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Schroders Capital has now successfully raised over $1.5 billion for private equity secondaries from its various vehicles over the past three years, showcasing the firm’s ability to raise capital across the platform and meet clients’ investment needs.

This follows a $410 million successful final close of Schroders Capital Private Equity Secondaries IV which underscores Schroders Capital’s strong track record and the confidence clients have in its secondaries strategy.

Schroders Capital’s secondary strategy is primarily focused on GP-led and select LP investment opportunities in the lower middle-market buyout and growth-equity segments.

Schroders Capital has been particularly active in GP-led secondaries, successfully closing on more than 50 transactions since 2021. This expertise and experience position the firm as a trusted partner for both GPs and LPs seeking liquidity solutions.

Last year, Schroders Capital acted as the lead investor in the single asset continuation vehicle for Init, a digital transformation service provider, managed by German buyout manager EMERAM Capital Partners. Earlier this year, Schroders Capital led a multi-asset continuation vehicle with Volpi Capital, including geospatial data company Cyclomedia.

Schroders Capital’s secondaries activity has a global reach, with dedicated teams in Zurich, New York, and Singapore. These strategically-located offices enable the firm to leverage its global network and expertise, providing investors with access to a diverse range of attractive secondaries opportunities across different geographies.

“We are proud of the success and growth of our secondaries activity. Our strong track record, deep industry expertise, and global presence position us well to continue delivering attractive investment opportunities to our clients,” said Christiaan van der Kam, Head of Secondary Investments Private Equity at Schroders Capital.

 

Mark Mobius Announces His Intention to Leave Mobius Capital Partners

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Mark Mobius takes a step back at Mobius Capital Partners. As reported by the firm in a statement sent to the London Stock Exchange, Mark Mobius will leave his post at Mobius Capital Partners in the coming months.

The veteran investor, specialized in emerging markets, will thus step back from the company he founded in 2018 with Carlos Hardenberg.

“Mark Mobius, founding partner, has notified the company and its investment manager, Mobius Capital Partners LLP (MCP), of his intention to retire from the company in the coming months, leaving a legacy of excellence and devotion to MCP and the Company. His contributions have been fundamental to the success of the company, and his approach to investing in emerging markets since the 1980s remains rooted in the investment philosophy of Mobius Capital Partners LLP,” states the company’s announcement.

As clarified in the statement, Hardenberg will lead the firm and continue managing Mobius Investment Trust, so his departure will not imply major changes in the daily operations of the investment firm. “Mobius Investment Trust will continue to be managed by Mobius Capital Partners LLP, which is led by Carlos Hardenberg, with the support of an experienced team of emerging market specialists. Carlos has been investing in emerging markets for over 23 years and has worked closely with Mark Mobius. He has successfully managed national, regional, and global emerging and frontier market portfolios, including the largest emerging market investment fund listed in London, generating significantly superior returns throughout the period,” the document further clarifies.

“Our trajectory over the past five years has been marked by progress, and we are truly grateful for the results achieved. We want to express our deepest gratitude to Mark for his exceptional contribution to emerging market investment throughout his long career and, more recently, to Mobius Capital Partners LLP and Mobius Investment Trust over the past five years. Mark’s dedication has been fundamental to our success. Looking ahead, I intend to promote our most talented employees to the rank of partners. With this, I want to recognize their great performance and commitment to Mobius Capital Partners LLP,” declared Carlos Hardenberg, founding partner.

Mobius has stated that he will focus on “new and exciting” projects in Dubai. “It has been an incredible journey at MobiusCap, where I have witnessed its growth and success, looking ahead I will shift my focus and dedicate more time to new and exciting projects in #Dubai, focusing on investments and consulting in #entrepreneurship. I also have two new books coming out soon, so stay tuned for more updates!” Mobius tweeted on the social network X (ex Twitter).

In the issued statement, Mobius commented: “I am proud of the solid performance of the investment team over the past five years, which demonstrates that a concentrated and differentiated portfolio of high-quality securities can generate exceptional returns. As a shareholder of Mobius Investment Trust, I will closely follow the development of the company and continue to be available to the team and the Board.”

Finally, on behalf of the Board of Directors, Maria Luisa Cicognani, chairwoman of Mobius Investment Trust, stated: “Mark and Carlos have played a decisive role in the success and profitability of Mobius Investment Trust since our IPO, and now that Mark intends to leave the partnership, we would like to express our immense gratitude for his advice and expertise over the years. We look forward to continuing to work with Mark, leveraging his support and vast knowledge of emerging markets, as Mobius Capital Partners LLP progresses with a strong and committed team led by Carlos, whom we are confident will continue to deliver outstanding results to our shareholders.”

Before creating Mobius Capital Partners, Mobius spent more than 30 years at Franklin Templeton Investments, most recently as Executive Chairman of Templeton Emerging Markets Group. He is one of the most reputed investors in the industry and known for over 40 years of working and traveling through emerging and frontier markets. During this time, he has been in charge of actively managed funds totaling more than 50,000 million dollars in assets.

Millionaires Share Practical Financial Tips in New Research

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A new study from Ameriprise Financial confirms that becoming a millionaire comes down to practical behaviors and discipline around money.

Ameriprise surveyed 580 Americans ages 27-77 who currently have a million dollars or more in investable assets to understand how they built their savings.

Eighty percent cited “financial planning and investing” as the top driver behind their ability to accumulate more than $1 million. They also said, “making a good income” (71%) and “living within my means” (69%) contributed to their financial success. Only 13 percent credited “luck” for their good fortune.

The Ameriprise study probed further to understand how millionaires view wealth. Most (85%) agreed that wealth means having a sense of financial security. Sixty-six percent of those surveyed said they associate the term with “the ability to provide for myself and my family,” and 58 percent linked it to the “freedom to do what I want.”

“There is no standard definition of what it means to be wealthy, but in general, investors associate it with having the means to live life on their terms,” said Marcy Keckler, Senior Vice President of Financial Advice Strategy at Ameriprise. “Whether that means having $1 million, $10 million, or any other figure, building wealth requires planning, prioritization, and taking steps to protect your future.”

Data from the survey was collected as part of a larger study Ameriprise published earlier in 2023.

The deeper look at millionaires also revealed:

  • Most millionaires don’t consider themselves wealthy. Six in ten (60%) investors with $1 million or more surveyed classify themselves as upper middle class, and an additional 31 percent say they are part of the middle class. Only eight percent characterize themselves as wealthy. For comparison, a quarter (25%) of those with $25,000-$999,000 in investable assets say they are upper middle class, 58 percent say they are middle class and two percent say they are wealthy.
  • Millionaires’ financial priorities differ from less affluent investors. Investors with more than $1 million revealed that their top three financial priorities are “protecting accumulated wealth” (62%), followed by “saving for retirement” (43%), and “managing market volatility” (32%). Comparatively, investors with under $1 million in assets said, “saving for retirement” is their top priority (49%), with “managing day-to-day living expenses” (42%) coming in second, and “increasing income” (35%) and “paying down debt” (35%) tying for third.

“Millionaires want to protect their hard-earned wealth and they’re looking for peace of mind that they’re on track to reach their next financial goals,” said Keckler. “It’s encouraging to see so many of them taking sound financial principles to heart. Investors at any life stage or wealth level can benefit from a comprehensive financial plan that accounts for their unique goals and the inevitable bumps in the road along the way.”

Rising Interest Rates Create New Dynamic in Insurance General Account Landscape

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Rising interest rates have ushered in a new investment environment for insurers, creating opportunities for managers with strong capabilities in managing U.S. fixed-income strategies, according to the latest Cerulli Edge—U.S. Institutional Edition.

Prior to 2021, insurance general accounts (IGAs) were operating in a vastly different investment environment due to consistently low interest rates. Yields on traditional public fixed-income products often were unattractive reinvestment opportunities, causing insurers to look elsewhere.

However, since the consistent rise in interest rates through 2022, insurers now see much more attractive reinvestment opportunities in traditional public fixed-income markets. In a survey Cerulli conducted during the first half of 2023, almost three-quarters of insurers (73%) polled planned to increase their allocations to traditional U.S. fixed-income products. In the first quarter of 2021, only 10% of insurers polled expected to increase allocations to U.S. fixed-income.

Despite high barriers to entry, insurers represent a particularly attractive channel for many asset managers with strong fixed-income capabilities. “The IGA channel is the largest institutional channel and is projected to continue growing, unlike other institutional channels such as corporate defined benefit plans,” says Chris Swansey, senior analyst. Fixed-income managers that demonstrate strong investment capabilities could secure long-term relationships. “Insurers are known to maintain relatively ‘sticky’ relationships, as they prefer to stick with the same managers for long periods,” he adds.

Asset managers attempting to win insurance assets will likely need insurance-specific capabilities in-house. “Insurers operate differently from other institutional investors in several ways,” says Swansey. “They have specific investment accounting requirements (e.g., STAT vs. GAAP), are subject to risk-based capital charges, and are taxable investors. Given these requirements, managers may find success building insurance businesses by hiring insurance specialists to build dedicated insurance sales teams,” he concludes.

Amber Group Partners with Solidus Labs to Bolster Crypto-Native Market Integrity

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Solidus Labs, the category-definer for crypto-native integrity solutions, announced that it has partnered with Amber Group, a leading provider of digital wealth management and crypto liquidity solutions.

The collaboration aims to integrate HALO, Solidus’ comprehensive crypto-native trade surveillance and market integrity hub, into Amber Group’s platform to enhance risk monitoring, prevent market abuse, and ensure greater compliance with evolving regulatory requirements.

Currently monitoring over 1 trillion events per day across more than 150 markets, safeguarding over 25 million individual and institutional entities, Solidus’ HALO will empower Amber Group to identify suspicious trading activity and respond in real-time using its machine learning-powered trade surveillance detection models.

“At Amber, security and compliance is fundamental to our business,” said Lin Ma, Chief Legal Officer of Amber Group. “We’re pleased to be partnering with Solidus Labs, recognized leader in crypto market integrity solutions. Their trade surveillance solution will enhance our suite of compliance measures, protect the integrity of our platform for our users and help us better meet evolving regulatory expectations.”

The partnership takes place amidst the rapid growth of Hong Kong’s digital asset market, which has seen the introduction of the new licensing regime for virtual asset trading platforms. Under this regime, Hong Kong’s Securities and Futures Commission (SFC) has established comprehensive licensing guidelines for centralised virtual asset trading platform operators to ensure stronger customer protection.

“Amber’s vision and commitment to bring best-in-class liquidity solutions and cutting-edge trading infrastructure to both institutional and high-net-worth investors presents a unique opportunity to propel the growth and maturation of the digital asset industry,” said Asaf Meir, Solidus Labs’ Founder and Chief Executive. “We’re delighted to support their effort through our crypto-native tools, and we look forward to working together to enable safer crypto trading.”

As part of Solidus’ commitment to the Hong Kong market, the firm recently held its world-renowned DACOM – Digital Asset Compliance and Market Integrity – Summit in Hong Kong. Bringing together the builders, movers and shakers of a safe and regulated crypto industry, DACOM HK focused on the Hong Kong SFC’s virtual asset licensing guidelines and how it can promote crypto adoption, DeFi’s market integrity challenges, and the industry’s ongoing collective action to make crypto markets fairer for everybody.

Holiday Travel is Cleared for Takeoff

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Americans are ready to travel for the holidays. For the third consecutive year, Deloitte explores travel intent ahead of the pivotal holiday season and the overall impact on the travel industry.

According to this year’s report, “2023 Deloitte Holiday Travel Survey,” concerns about health and travel delays are diminished as consumers across income groups map out trips to make this holiday season a memorable one.

Nearly half (48%) of Americans intend to travel between Thanksgiving and mid-January, with a larger share taking trips beyond only visiting family and friends. Desire to keep traditions alive may convince travelers to pack their bags, though many are evaluating how often, and for how long, they head out this season.

While more Americans intend to travel, they will take fewer trips (1.88 in 2023 vs. 2.01 in 2022) that are shorter in duration (75% say their longest trip will last one week or less vs. 69% in 2022), but plan to spend more this year ($2,725 in 2023). With fewer trips planned, travel concentrates around two major holidays: Thanksgiving through the end of November (33%) and Christmas through New Year’s Eve (27%). Trips get longer farther into the holiday season.

Holiday travelers are keen to connect with loved ones: 58% say time with friends and family is the top motivator for their longest trip this season. Another 51% seek rest and relaxation. While both are often big travel motivators, travelers put a greater emphasis on these factors during the holidays than in the summer.

Boomers are traveling again: They constituted just one-fifth (21%) of the traveling public over the holidays in 2022; this year the group will make up 29% of travelers. Boomers also tend to spend more per trip compared to Gen Z and Millennials.

Younger generations plan to take more trips and to spend more across the season: Gen Z travelers plan an average of 2.1 trips over the holidays, a close second to millennials at 2.2. One in 4 Gen Z travelers say they will significantly increase their budgets year-over-year, the highest portion of any generation.

About 1 in 5 travelers (18%) say they are spending significantly less on holiday travel than last year. The same share of travelers (18%) plan to spend significantly more this season. Financial concerns are the main reason travelers will spend less, while higher prices are the top factor they plan to spend more.

For those not traveling, finances are the top deterrent (38%). Health and disruption worries are lower on the list, cited by only 11% of non-travelers each (compared to 18% in 2022) and indicating that the concerns of prior years may be leveling out.

Travelers pack away some pandemic-era preferences

Some preferences that saw a surge during the pandemic are declining as travelers plan to return to hotels and international destinations in greater numbers. As Americans return to travel’s new normal, the influence of younger generations is growing, elevating the role of social media in trip planning.

Hotels are back in a big way, as 56% of holiday travelers plan to book a stay at some point this holiday season, up from 35% in 2022. Preference for private rentals remains flat at 15%.

More than one-third (37%) of travelers will take a flight at least once during the holiday season. Meanwhile, about half (53%) of American travelers are planning road trips, down from nearly two- thirds (64%) in 2021.

While 26% of air travelers will fly to international destinations, overseas travel makes up a bigger share of travel in early January compared to the rest of the season. International travelers are also more likely to stay in paid lodging (73% in hotels and 28% in private rentals for at least part of their longest holiday trip), as 1 in 5 say they are making up for trips they missed out on due to the pandemic. International travelers are more likely to rely on social media to select their travel destinations (52% vs. 39% domestic travelers) as well as social content like apps, videos, travel websites and Generative AI.

Participation in travel activities is up across most categories year-over-year, including visiting a major attraction (43% in 2023 vs. 36% in 2022) and attending a ticketed event such as a concert or festival (30% in 2023 vs. 23% in 2022).

Gen Z and millennials lead in efforts to travel more sustainably, particularly when it comes to prioritizing hotels with higher sustainability ratings (23% and 25%, respectively), which is the most popular environmentally conscious travel choice.

US Consumer Confidence Fell Again in October

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The Conference Board Consumer Confidence Index® declined moderately in October to 102.6 (1985=100), down from an upwardly revised 104.3 in September. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—declined to 143.1 (1985=100) from 146.2.

The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell slightly to 75.6 (1985=100) in October, after declining to 76.4 in September. The Expectations index is still below 80—the level that historically signals a recession within the next year. Consumer fears of an impending recession remain elevated, consistent with the short and shallow economic contraction we anticipate for the first half of 2024.

“Consumer confidence fell again in October 2023, marking three consecutive months of decline,” said Dana Peterson, Chief Economist at The Conference Board. “October’s retreat reflected pullbacks in both the Present Situation and Expectations Index. Write-in responses showed that consumers continued to be preoccupied with rising prices in general, and for grocery and gasoline prices in particular. Consumers also expressed concerns about the political situation and higher interest rates. Worries around war/conflicts also rose, amid the recent turmoil in the Middle East. The decline in consumer confidence was evident across householders aged 35 and up, and not limited to any one income group.”

Peterson added: “Assessments of the present situation were driven by less optimistic views on the state of business conditions, but consumers’ rating of current job availability held steady. Fewer consumers said that business conditions were good, and more said they were bad. Regarding the employment situation, slightly fewer consumers said that jobs were ‘plentiful’ compared to September, but the number saying jobs were ‘hard to get’ also declined. However, when asked to assess their current family financial conditions (a measure not included in calculating the Present Situation Index), those responding ‘good’ rose, and those citing ‘bad’ were little changed. This suggests consumer finances remain buoyant in the face of elevated inflation.”

“Expectations for the next six months stayed below the recession threshold of 80, reflecting a decline in confidence about future business conditions, job availability, and incomes. The continued skepticism about the future is notable given US consumers—at least through the third quarter of this year—continued to spend heavily on both goods and services. Expectations that interest rates will rise in the year ahead ticked up in October, and the outlook for stock prices weakened slightly. Furthermore, average 12-month inflation expectations increased in October to 5.9 percent, after holding steady at 5.7 percent for the past three months. The measure of expected family financial situation, six months hence (not included in calculating the Expectations Index) continued to fall.”

“More than two-thirds of consumers still said recession is ‘somewhat’ or ‘very likely’ in October. The fluctuating soundings likely reflect ongoing uncertainty given mixed buying plans. On a six-month moving average basis, plans to purchase autos and appliances rose while plans to buy homes—in line with rising interest rates—continued to trend downward.”

Vontobel strengthens Wealth Management team in Miami

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Vontobel Swiss Financial Advisors (Vontobel SFA) has appointed Arturo Castelo and Silvia Ales as Senior Relationship Managers to support Latin American investors with diversified wealth management solutions. 

With nearly 40 years of combined experience in the financial services industry, Arturo Castelo and Silvia Ales will be  responsible for strengthening client relationships and ensuring high-quality service standards. Arturo will focus on investors  primarily in Mexico, and Silvia will cover Central America and Colombia. 

Arturo joins Vontobel SFA from B. Riley Wealth Management, where he was a financial advisor focused on systematic and ESG equity investing. Previously, he held senior roles at Morgan Stanley Wealth Management and UBS.  

Silvia brings more than 17 years of experience from Citi Private Bank’s Latin America Region in Miami, where she held various roles working with ultra-high-net-worth investors in Central and South America. 

“As we look forward to building on our offering for Latin American clients, Arturo’s and Silvia’s client-oriented skillset across  asset classes will be instrumental in deepening our relationships and meeting clients’ investment goals,” said Victor Cuenca, Head of Vontobel SFA Miami Branch. “We are committed to helping clients diversity their wealth globally with quality solutions,  and these appointments support our advancement of these efforts in-line with the needs of our clients.” 

Vontobel SFA offers US and Latin American investors tailored solutions, centered on diversification through a variety of  jurisdictions, geographic areas and currencies. Vontobel SFA is headquartered in Zurich, with offices in Geneva, New York and  Miami. Vontobel SFA is the largest Swiss-domiciled wealth manager for US clients seeking an account in Switzerland for  diversification purposes.

M&A Hit Multi-Year Low, S&P Global Market Intelligence Quarterly Report Finds

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EBW Capital and AIS Financial form strategic alliance

M&A market retrenched to even more depressed levels in the third quarter of 2023, according to S&P Global Market Intelligence’s newly released quarterly global Q3 2023 M&A and Equity Offerings Market Report.

During the period, only 8,775 deals were announced around the world, down 17.3% from the prior quarter and 28.3% from year-ago levels.

Equity issuance activity received some fanfare in the third quarter due to a handful of initial public offerings, but the momentum from those deals has been slowed by the lackluster public market debuts from companies involved in the more notable IPOs.

The prospects for dealmaking going forward are challenged by economic uncertainty and the likelihood that interest rates will stay higher for longer. Also, geopolitical unrest is growing with the latest Israel-Hamas war, and that creates yet another headwind for those considering transactions.

“Heightened geopolitical concerns add to an already uncertain macroeconomic outlook, and uncertainty is never good for dealmaking,” said Joe Mantone, lead author of the report. “The Federal Reserve is nearing the end of its rate-hiking cycle and gaining clarity on peak rates would be positive for transaction activity, but if rates remain elevated, that will keep financing costs up and make some deals harder to pencil out.”

Key highlights from the quarterly report include: Global equity issuance has fallen quarter over quarter in six of the last seven quarters; the total value of global IPOs fell 9.1% quarter over quarter and plummeted 25.8% year over year to $33.80 billion and the third quarter marked the first time since the pandemic that the number of global M&A announcements dropped below 10,000.

The quarterly report provides an overview of global M&A and equity issuance trends, offering insights into the sectors and geographies that are seeing the most activity. It also focuses on deals with the highest valuations and strategies larger players pursue that underscore trends occurring throughout an industry. S&P Global Market Intelligence has produced the quarterly, global M&A and equity offering report since the first quarter of 2018.