Foto: LinksmanJD . Panamá recibirá el Latin Private Wealth Management Summit en septiembre
The Latin Private Wealth Management Summit is the premium forum bringing leaders from Latin America’s leading single and multi-family offices and qualified service providers together.
Schedule one on one business meetings with qualified buyers
Grow sales faster through a time efficient format
Network with high level executives in a luxurious and stimulating environment
All inclusive investment
Key Topics
Private Equity
Alternative Investments
Asset Protection
Handling International Investments
FATCA and CRS
Family Conflict and decision making
Cyber Security
Network with industry experts like:
Guillermo de Leon, Managing Director, Blue Line Investments
Elaine King, Founder & CEO, Family and Money Matters Institute
Nelson Cury Filho, CEO, Cedar Tree Family Business Advisors
Martin Zavalia, Head of Non-Financial Services, Guggenheim Partners Latin America
Jesus Gustavo Garza, Chief Economist, ITAU BBA
For more information, please contact Deborah Sacal or follow this link.
Foto: Instituto Siglo XXI
. Estados Unidos ocupa la decimocuarta posición en seguridad para la jubilación
The United States ranks 14th for retirement security, according to the 2016 Global Retirement Index, released by Natixis Global Asset Management. The index examines key factors that drive retirement security and provides a comparison tool for best practices in retirement policy across 43 countries.
Among the leading countries for retirement security identified by the Index, Northern Europe dominates the top 10, including Norway at No. 1, followed by Switzerland, Iceland, Sweden, Germany, The Netherlands and Austria. They are joined by New Zealand (No. 4), Australia (No. 6) and Canada (No. 10).
“Retirement used to be simple: Individuals worked and saved, employers provided a pension, and payroll taxes funded government benefits, resulting in a predictable income stream for a financially secure retirement,” said John Hailer, CEO of Natixis Global Asset Management in the Americas and Asia. “Demographics and economics have rendered the old model unsustainable, but the leaders in our index are finding innovative ways to adapt to the new reality and provide a blueprint for the rest of the world.”
The Natixis Global Retirement Index, introduced in 2013, creates an overall retirement security score based on four factors that affect the lives of retirees. Finances in retirement are an important component, but three other sub-indices that gauge material wellbeing, health, and quality of life are included to provide a more holistic view. With this year’s edition, Natixis has focused on a smaller number of countries than in the past, mainly developed economies where retirement is a pressing social and economic issue.
Despite many positives, warning signs clear for the U.S.
The U.S. ranking benefits from high per capita income, the stability of its financial institutions and its low rate of inflation, according to index data compiled by Natixis. In addition, the nation’s unemployment rate has moved lower, continuing a long-term trend.
In contrast to these positive factors, the U.S. also has one of the highest levels of income inequality among developed nations, putting the goal of retirement savings beyond the reach of millions. The U.S. also has a growing ratio of retirees to employment-age adults, which means there are fewer workers to support programs such as Social Security and Medicare, putting increasing pressure on those government resources over time. That trend, combined with the broader shift from defined-benefit to defined-contribution employer retirement plans, is transferring the burden of retirement financing to individuals.
Americans recognize the shift in funding responsibility
American investors are acutely aware of increasing the need for individuals to fund a greater share of retirement. In a survey of investors conducted by the firm earlier this year, 75% said this responsibility increasingly lands on their shoulders.
However, many Americans may be underestimating how much money they need to save in order to retire comfortably. Investors estimate they will need to replace only 63% of their current income when they retire, well short of the 75% to 80% generally assumed by planning professionals.
In addition, a large segment of Americans simply doesn’t have access to employer-sponsored savings programs such as 401(k) plans. The U.S. Department of Labor estimates that one-third of the nation’s workforce doesn’t have access to a retirement plan. A separate survey of participants in defined-contribution plans found that, even when they have access to a plan, four in 10 contribute less than 5% of their annual salary.
U.S. investors see clear hurdles to financial security in retirement, identifying their three greatest challenges as long-term care and healthcare costs, not saving enough, and outliving their assets. When asked how they would make up for an income shortfall, two-thirds of U.S. investors say they will continue to work in retirement.
“Americans must come to grips with their increasing responsibility for their own retirement security,” said Ed Farrington, Executive Vice President of Retirement Services for the asset management firm. “The leading nations in our research are developing effective solutions, but we also need greater commitment by decision makers, engagement by individuals and a willingness to learn from the experiences of other countries around the world.”
In a market update webcast, Western Asset Management Chief Investment Officer Ken Leech described a global economy rife with problems – yet one that continues to grow, especially in the United States, even if slowly and with evident risks.
“We expect steady, unspectacular U.S. and global growth,” Leech said adding: “That’s been our basic message: slow but sustainable growth globally. The fear the market had in the first quarter, that the slow growth rate might actually fall, is what got the markets in pretty dire straits.”
During that first quarter, Western Asset did not believe the global growth situation was going to develop into a global recession, (a prediction that has so far proven correct), but it has warranted exceptional monetary accommodation.
“Policymakers have to be attentive to downside risks, especially in an environment where U.S. and global inflation remain exceptionally subdued,” Leech said. “Fortunately, central bank accommodation is aggressive, and increasing. That means U.S. Treasury bonds and sovereign bonds will be underpinned by these low policy rates, which will continue around the world.”
As for the U.S. Federal Reserve, which Leech said has made “a dovish pivot,” he concluded, “The Fed is going to be very cautious, and is unlikely to be moving rates up any time soon.”
Leech continues to see strong opportunity ahead in investment grade (IG) corporate bonds. Regarding Europe, the recent Brexit vote injected a high level of uncertainty into the outlook. He expects that the European Central Bank (ECB) will expand its QE program, both in length of the program and the size. Addressing emerging markets, Leech reported a generally positive outlook. “There’s a real case to be made for emerging markets, both in local currency and dollar-denominated bonds,” he said. “That’s an area we are focusing on even more meaningfully than coming into the year. The yield spread between EMs and developed has reached crisis wide. When you think about valuations and people needing yield, this is where yield is abundant… The two positions we’ve liked structurally have been Mexico and India. Over the course of the year we have been opportunistically investing in a number of others. One I’d highlight is Brazil.”
“Another point highlighted by the World Bank is the bumpy adjustment in China,” he added. “China’s growth is going to be slow. We need to be very thoughtful about it, but the policy adjustment in China was so aggressive that they could avoid a hard landing.”
“Global headwinds are straightforward. When you look at world GDP, we have been in the camp that a 3 percent growth rate, very slow by historical standards, can be maintained. A low bar, and it’s going to take a lot of policy help. Fortunately, we’ve had that, which truncated some of the downside risk. But the major headwind of growth over time is the enormity of the debt burden around the world. It’s going to take time, low interest rates and a continuation of policy support.” He concluded.
You can watch the replay of the webcast in the following link.
Fidelity Investments has announced the national launch of Fidelity Go, an advisory solution designed for investors seeking a trusted team to manage their money through a simple and efficient digital experience.
The platform was developed in collaboration with younger, digitally-savvy investors, and is a unique combination of a professionally managed portfolio, an easy-to-use digital dashboard, integration with Fidelity’s broader investment tools and services, and an all-in cost that is among the lowest in the industry.
“Fidelity Go makes professionally managed portfolios broadly accessible by helping people move from saving to investing quickly and efficiently, with costs starting at approximately $20 a year,” said Rich Compson, head of managed accounts at Fidelity. “Our goal is to help people meet their lifetime financial needs, and Fidelity Go is a new way for Fidelity to help digital-first investors and those just getting started.”
Investors also benefit from Fidelity’s broader capabilities, including integration with its online financial planning tools, ongoing monitoring with Fidelity mobile apps including Apple Watch alerts, and the ability to direct the unlimited 2% cash back from the new Fidelity Rewards Visa Signature Card into their Fidelity Go accounts. “Integration with Fidelity’s broader experience can help customers both enhance and simplify their financial lives,” said Compson.
Foto: Jeff Gunn
. El New England College of Business lanza una especialización en Global Finance Trading
New England College of Business launched a new concentration in its Master of Science in Finance (MSF) degree in Global Finance Trading. The new concentration is being offered in response to a growing worldwide demand for graduates trained in practical financial knowledge and an understanding of the processes and technologies of global trading.
The new Global Finance Trading concentration was developed through collaboration between New England College of Business and London Academy of Trading.
The Global Finance Trading concentration helps students adopt the strategies of maximizing trading gains while minimizing risks, learn to utilize fundamental analysis and technical indicators, and also acquire an understanding of trading psychology and risk management.
Dr. Ned Gandevani, New England College of Business, Graduate Finance Program Chair, indicated that research shows that some students lack training in asset management, and this new concentration stresses real-world scenarios to help students fill this gap in skill sets. “In addition to classroom training and theoretical learning, students manage assets through simulations,” Gandevani said.
In addition to acquiring practical skills, students also become familiar with processes and technologies used by finance professionals throughout the world. The program covers such areas as Foreign Exchange (Forex), commodities and stock indices.
Foto: U.S. Army
. Los asesores independientes están más satisfechos que los que trabajan por cuenta ajena
The J.D. Power 2016 U.S. Financial Advisor Satisfaction Study recently released reveals that overall satisfaction averages 722 among employee advisors, up 21 points from 701 in 2015, and 755 among independents, down 18 points from 773 last year.
The study measures satisfaction among both employee advisors (those who are employed by an investment services firm) and independent advisors (those who are affiliated with a broker-dealer but operate independently) based on seven key factors (in alphabetical order): client support; compensation; firm leadership; operational support; problem resolution; professional development support; and technology support. Satisfaction is measured on a 1,000-point scale.
“No doubt, the wealth management industry is in the eye of the storm right now, and the implications are far-reaching for firms that have been rooted in the traditional financial advisory services business model,” said Mike Foy, director of the wealth management practice at J.D. Power. “Financial advisors will obviously still be a critical part of the future of the business. However, key industry trends—such as the availability of low-cost robo-advice; the rise of so called “validators” who want to make more of their own financial decisions even while supported by an advisor; and the new fiduciary rules putting clients’ best interests ahead of an advisor’s own profit—set the stage for fewer and different kinds of advisors and an increasingly exclusive focus on the high net worth segment where FAs can add the most value.”
The study finds that large scale retirement is a reality with nearly one-third (31%) of advisors poised to retire in the next 10 years. Between 2014 and 2016, the number of advisors indicating they plan to retire in the next 1-2 years has risen to 3% from 2%.
Also that many advisors are moving to independent RIA shops, switching firms.The number of employee advisors indicating they will likely go independent in the next 1-2 years doubled from 6% in 2014 to 12% in 2016 Another 12% of advisors say they are likely to join or start an independent registered investment advisor (RIA) practice in the next 1-2 years, up from 7%.
The study reveals that there are billions in losses at stake. At the current expected rate of attrition due to retirement and firm switching, a firm with 10,000 financial advisors may have more than half a billion (approximately $585 million) in annual revenue at risk during the next 1-2 years, highlighting the critical need to retain top producers and to effectively manage succession planning to transition assets to newer advisors.
Finally, the work shows investment firms must figure out how to satisfy their advisors because the stakes are so high. Among employee advisors who are highly satisfied (overall satisfaction scores of 900 and above), only 1% say they “definitely will” or “probably will” leave their firm in the next 1-2 years, compared with 46% of dissatisfied employee advisors (scores of 600 and below) who say the same. The same trend holds true for independent advisors (2% and 45%, respectively).
“These changing dynamics in the advisory business create new challenges for firms to focus retention efforts on top producers; attract new talent with skills aligned with the direction the business is heading; and create or refine hybrid business models that incorporate more technology and self-service options into their offerings,” Foy added.
According to Otto Christian Kober, Global Head of Methodology at Thomson Reuters Lipper, assets under management in the global collective investment funds market grew US$188.8 billion (+0.5%) for June and stood at US$36.2 trillion at the end of the month. Estimated net outflows accounted for US$27.8 billion, while US$216.6 billion was added because of the positively performing markets. On a year-to-date basis assets increased US$998.9 billion (+2.8%). Included in the overall year-to-date asset change figure were US$9.6 billion of estimated net outflows. Compared to a year ago, assets decreased US$122.0 billion (-0.3%). Included in the overall one-year asset change figure were US$467.7 billion of estimated net inflows. The average overall return in U.S.-dollar terms was a positive 0.4% at the end of the reporting month, outperforming the 12-month moving average return by 0.7 percentage point and outperforming the 36-month moving average return by 0.3 percentage point.
The top fund promoter by market share was Vanguard, followed by Fidelity and BlackRock.
Most of the net new money was attracted by bond funds, accounting for US$18.1 billion, followed by commodity and “other” funds with US$4.2 billion and US$1.9 billion of net inflows, respectively. Equity funds, with a negative US$25.6 billion, were at the bottom of the table for June, bettered by money market funds and alternatives funds with US$19.8 billion and US$4.9 billion of net outflows. The best performing funds for the month were commodity funds at 4.5%, followed by “other” funds and bond funds with 1.6% and 1.5% returns on average. Equity funds bottom-performed with a negative 0.5%, bettered somewhat by alternatives funds and real estate funds with negative 0.4% and negative 0.2%.
In a year-to-date perspective most of the net new money was attracted by bond funds, accounting for US$202.9 billion, followed by commodity funds and “other” funds with US$22.3 billion and US$6.1 billion of net inflows, respectively. Equity funds were at the bottom of the table with a negative US$115 billion, bettered by money market funds and mixed-asset funds with US$89.3 billion and US$43.3 billion of net outflows. The best performing funds year to date were commodity funds at 13.7%, followed by bond funds and mixed-asset funds with 5.7% and 4.7% returns on average. Alternatives funds bottom-performed with a negative 0.1%, bettered by “other” funds and money market funds with 1.6% and 1.6%.
Most of the net new money over the past 12 months was attracted by money market funds, accounting for US$422.3 billion, followed by bond funds and alternatives funds with US$186.3 billion and US$27.6 billion of net inflows, respectively. Mixed-asset funds were at the bottom of the table with a negative US$157.5 billion, bettered by equity funds and “other” funds with US$35.6 billion and US$1.7 billion of net outflows. The best performing funds over the last 12 months were bond funds at 1%, followed by money market funds and mixed-asset funds with negative 2.6% and negative 3.6% returns on average. Commodity funds performed the worst with a negative 7.9%, bettered by equity funds and “other” funds with negative 6.9% and negative 5.2%.
Looking at fund classifications for June, most of the net new money flows went into Lipper’s Bond USD Medium-Term classification (+US$11.0 billion), followed by Money Market GBP and Bond USD Municipal (+US$6.9 billion and +US$5.6 billion). The largest outflows took place in Money Market EUR with a negative US$22.2 billion, bettered by Equity US and Equity Europe with negative US$15.0 billion and negative US$7.8 billion.
Looking at fund classifications year to date, most of the net new money flowed into Bond USD Medium-Term (+US$57.5 billion), followed by Equity Global ex US and Bond USD Municipal (+US$39.7 billion and +US$33.1 billion). The largest net outflows took place in Money Market USD, with a negative US$57.5 billion, bettered by Equity US and Money Market CNY with negative US$55.1 billion and negative US$49.7 billion.
Wikimedia CommonsFoto: Montgomery Allen. Ya empezó la gran migración hacia la deuda de los mercados emergentes
After a three-year bear market in emerging markets, low-to-negative yields, a continued expansion in the aggregate balance sheets of the larger central banks—Fed, ECB, BoJ, BoE and PBo—as well as improving fundamentals in emerging world, are creating a great migration toward Emerging Market (EM) debt.
With the ‘substantial’ increase in economic, political and institutional uncertainty following the Brexit vote, the IMF has cut their global forecast for 2017 by 0.1 percentage point, to 3.4%. The fallout from the vote remains locally contained however, and the IMF expects growth in emerging markets to accelerate to 4.6% in 2017, from 4.1% this year and 4.0% in 2015. Even had the vote been to remain, the IMF stated they had been prepared to raise the outlook for 2017, “on the back of improved performance in a few big emerging markets, in particular Brazil and Russia.”
While the three key headwinds against EM growth—1) USD strength fueled by monetary policy divergence in developed markets, 2) uncertainties around China’s growth and FX policy, and 3) a sharp decline in commodity prices, are loosing strength. After almost three years of subpar growth, some “green shoots” have appeared in EM economies -specially in China, Brazil and Russia, which were most hit during the recent downturn. Higher commodity prices have provided respite to long-suffering commodity producers; a fundamental healing that reinforces the recovery in asset prices. And although global policy divergence is still on the table, – with a slightly hawkish Fed and Japan going for a modest dose of monetary stimulus, the scarcity of yield has actually been accentuated by the Brexit vote.
Meanwhile, there are still other strong political uncertainties in the developed world that worry investors. Beside the U.S. elections on November 8, and Spain’s inability to define its government, Italy will be conducting a constitutional reform referendum later this year and Germany is scheduled to undergo federal elections in late-summer 2017.
Considering the actual political event risk in developed nations with low or negative yields, investors worldwide are once again looking into EM, making it so portfolio flows may become a key driver of EMD this year.
While local currency debt provides a greater potential for alpha generation, given currency volatility heightens in periods of uncertainty, hard currency EM debt is likely to provide a more stable income stream than local currency counterparts. A pure EM unconstrained strategy that picks from the best opportunities available might be the best option for investors seeking income stability and total return in Emerging Markets debt. Meanwhile, for those looking to maximize the return on their investment through a combination of capital growth and income, an option would be to invest on the BGF EM local currency bond fund. The Fund invests at least 70% of its total assets in fixed income securities denominated in local currencies of developing market countries, including bonds and money market instruments.
New research from Cerulli Associates explores the evolution of wholesaler and key accounts roles in response to the influence of professional buyers at centralized home-office research teams in the United States.
“Asset managers are on a continuous hunt to identify the most effective factors impacting a financial advisor’s product decisions,” states Kenton Shirk, associate director at Cerulli. “As the industry evolves, managers face a key question: to what degree do centralized research teams at home offices influence investment decisions, as opposed to decentralized decisions made by financial advisors and, in some instances, their teams?”
“The challenge lies in discerning the extent to which various parties–the home-office research team versus other influencers within a practice, such as investment analysts or chief investment officers (CIOs)–shape a given advisor’s product decision,” Shirk continues. “As a result of these shifting points of influence, key accounts and wholesaling teams are wading through increasingly murky waters, and their structures and strategies are changing in response.”
The firm believes that the dueling influences of centralized home-office research teams and decentralized advisor investment decisions will have significant ramifications for asset management distribution teams in coming years. With a large and diverse field of advisors, asset managers of scale will need to address both home-office research teams and individual advisor relationships. Asset managers need to cater to large advisor teams with centralized portfolio management and institutional-like buying processes. In addition, they need to address distribution partners to ensure that they maximize their influence with advisors who rely on recommended lists.
“Cerulli believes that key accounts teams will support fewer, larger distribution partners. Key accounts teams will grow in importance and asset managers will continue increasing the quantity and quality of their teams and resources,” Shirk explains. “The role of wholesalers will also continue to evolve. Advisors who rely heavily on home offices can still be influenced by wholesalers who can provide information to help an advisor make a final decision. But wholesalers need to pinpoint these subtle influence points quickly. Identifying these high-impact opportunities will likely be a major objective of predictive analytics initiatives as they continue to evolve.”
The European Securities and Markets Authority (ESMA) has published its Advice in relation to the application of the Alternative Investment Fund Managers Directive (AIFMD) passport to non-EU Alternative Investment Fund Managers (AIFMs) and Alternative Investment Funds (AIFs) in twelve countries: Australia, Bermuda, Canada, Cayman Islands, Guernsey, Hong Kong, Japan, Jersey, Isle of Man, Singapore, Switzerland, and the United States.
Currently, non-EU AIFMs and AIFs must comply with each EU country’s national regime when they market funds in that country. ESMA’s Advice relates to the possible extension of the passport, which is presently only available to EU entities, to non-EU AIFMs and AIFs so that they could market and manage funds throughout the EU.
For each country, ESMA assessed whether there were significant obstacles regarding investor protection, competition, market disruption and the monitoring of systemic risk which would impede the application of the AIFMD passport.
According to ESMA’s advice:
There are no significant obstacles impeding the application of the AIFMD passport to Canada, Guernsey, Japan, Jersey and Switzerland;
If ESMA considers the assessment only in relation to AIFs, there are no significant obstacles impeding the application of the AIFMD passport to AIFs in Hong Kong and Singapore. However, ESMA notes that both Hong Kong and Singapore operate regimes that facilitate the access of UCITS from only certain EU Member States to retail investors in their territories.
There are no significant obstacles regarding market disruption and obstacles to competition impeding the application of the AIFMD passport to Australia, provided the Australian Securities and Investment Committee (ASIC) extends to all EU Member States the ‘class order relief’, currently available only to some EU Member States, from some requirements of the Australian regulatory framework;
There were no significant obstacles regarding investor protection and the monitoring of systemic risk which would impede the application of the AIFMD passport to the United States (US). With respect to the competition and market disruption criteria, ESMA considers there is no significant obstacle for funds marketed by managers to professional investors which do not involve any public offering. However, ESMA considers that in the case of funds marketed by managers to professional investors which do involve a public offering, a potential extension of the AIFMD passport to the US risks an un-level playing field between EU and non-EU AIFMs. The market access conditions which would apply to these US funds in the EU under an AIFMD passport would be different from, and potentially less onerous than, the market access conditions applicable to EU funds in the US and marketed by managers involving a public offering. ESMA suggests, therefore, that the EU institutions consider options to mitigate this risk;
For Bermuda and the Cayman Islands, ESMA cannot give definitive Advice with respect to the criteria on investor protection and effectiveness of enforcement since both countries are in the process of implementing new regulatory regimes and the assessment will need to take into account the final rules in place. For the Isle of Man ESMA finds that the absence of an AIFMD-like regime makes it difficult to assess whether the investor protection criterion is met.
This Advice, required under the AIFMD, will now be considered by the European Commission, Parliament and Council. You can download it in the following link.
