While most advisors are enjoying greater success than they did a few years ago, many are challenged with how to best communicate with their clients, according to new research released from Pershing LLC (Pershing), a BNY Mellon company. The Second Annual Study of Advisory Success: A New Age of Client Communications and Client Expectations explores the value of key client touchpoints and identifies opportunities for financial advisors to strengthen their connections and be more effective.
Study of Advisory Success is a longitudinal study that defines what success means for advisors in today’s environment and highlights the most salient issues that advisors face. Based on this year’s research, advisors who adapt to client communications preferences and expectations are more successful than those who do not.
“Lessons learned from the financial crisis, combined with the popularity of smartphones and other devices, have raised client expectations,” says Kim Dellarocca, managing director at Pershing. “With the proliferation of different touchpoints and a greater apprehension of financial risk, clients expect more frequent, tailored communications in real time, and many advisors have not yet developed a consistent communications strategy. It is essential for advisors to understand how, where and when current and potential clients prefer to communicate.”
Twenty years ago, advisors connected with clients through three primary channels: phone, mail and in-person meetings. Today, these channels have grown to include email and social media, which are ingrained in their clients’ lives, raising the bar for effective communications between advisors and their clients.
The study identifies three key areas in which advisors should focus their communication efforts and actionable steps they can take to improve in these areas:
Personal brand: Advisors who focus on their personal brands seem to enjoy greater success. More than half (53 percent) of advisors strongly agree that their personal brand is more important than their firm’s brand, but they are not always communicating their value proposition to clients. According to the study, one out of three advisors is missing a mission statement on their personal website, and a quarter of advisors do not have a mission statement on their team websites.
Advisors should see themselves the way their clients do, particularly online. Brands are most impactful in helping to attract and engage the right customers, and advisors should take the time to see themselves the way their clients and prospects do by taking the time to discover their own online presence through searches and then refining that presence to be more effective.
Social media: The study shows that advisors have mixed feelings about social media. Advisors can use it to engage many current and potential clients, and to share content quickly and easily. Two in five advisors do not use social media for business purposes, but among those who have used it for business, 73 percent reported positive experiences and an impact on their business. More than half (52 percent) of advisors feel that they have not invested enough time in social media, including 11 percent who say they do not spend enough time listening to their clients on those platforms. An advisor’s lack of presence on the web and social networks might deter younger prospects from becoming potential clients.
Advisors should capitalize on social media and become savvy content curators. While many advisors cite a lack of time as the reason for not using social media, there are a number of platforms that can serve as an efficient vehicle for listening, distribution and engagement. Advisors should have the ability to discern which information has value and is worth sharing. It is important that advisors do not overextend themselves. They need to make sure they are able to reasonably maintain any social properties they create. Advisors should value quality over quantity in this case.
Milestones: Relationships require regular contact and attention. Major lifecycle events such as retirement or divorce call for heightened personal attention, yet 20 percent of advisors do not reach out to clients in such circumstances, jeopardizing the client relationship.
Advisors should reach out about the good news, too. Clients are interested in hearing from their advisors regarding positive milestones, such as a birthday, new job or the birth of a child. Communicating with clients under a range of circumstances will make outreach in turbulent times less reactionary and forced.
“With client communication channels and protocols continuing to evolve, what advisors say and how quickly they respond counts more than ever,” says Dellarocca. “If they are not sure how their clients prefer to communicate, they should just ask.”
To obtain a copy of Pershing‘s Second Annual Study of Advisor Success: A New Age of Client Communications and Client Expectations, please visit pershing.com/advisorsuccess.
CC-BY-SA-2.0, FlickrK Twin Towers (Seul). La estadounidense KKR y LIM Advisors compran las K Twin Towers de Seul
KKR, a leading global investment firm, and LIM Advisors, a leading Asian-based multi-strategy investment group, announced the completion of the joint acquisition of K Twin Towers, a prime commercial property in Seoul’s central business district.
KKR and LIM Advisors made the purchase through the acquisition of 100 per cent of the common equity in a trust managed by Vestas Investment Management. Additional terms of the transaction were not disclosed.
Completed in 2012, K Twin Towers is a premium-grade commercial property located in the Gwanghwamun precinct within the Seoul central business district. It occupies more than 900,000 square feet [83,800 square metres / 25,300 pyeong] across 22 floors of premium office and retail space and has commanding views of the Gyeongbokgung Palace and the Presidential Blue House. K Twin Towers spans two office towers occupied by tenants that include major multinational and South Korean corporations, financial institutions and law firms.
K Twin Towers received a Green 2nd Rating from the government-backed environmental building certification system Green Standard for Energy and Environmental Design (“G-SEED”). This is the second-highest rating equating to ‘Excellent’ status in South Korea.
Bryan Southergill, Director, Real Estate, at KKR Asia, said, “We are very pleased to expand our real estate business to the South Korean market and to collaborate with LIM Advisors to acquire one of Seoul’s top commercial buildings.”
George W. Long, Chairman and Chief Investment Officer of LIM Advisors, said, “We are delighted to have been able to source and negotiate this investment and to work with our partner KKR to complete this major real estate transaction in the heart of downtown Seoul.”
Deutsche Asset & Wealth Management, Shin & Kim, and Deloitte advised both parties on the transaction.
Disclosure of financial information is obligatory for all companies listed on the main global stock exchanges. This information generally provides a good overview of a company’s financial performance, but it is not enough to make a decision about a company’s sustainability, which is linked to long-term operational and financial stability. Even companies with low levels of debt and high profits may be subject to potential risks from non financial areas such as environmental, social and governance (ESG) criteria. For instance, companies that do not embed human rights in their day-to-day activities may face less productivity and a higher chance of strikes, which can bring additional risks to investors. Similar problems may arise when a company does not apply solid environmental or governance practices.
The growing concern among investors about ESG issues has caused many companies to report information concerning their ESG-related indicators in the form of social reports, additions to their annual reports, special sections on websites and press releases. This information helps investors better evaluate companies’ risks and find possible ways to mitigate them. Yet, disclosure of such information is mostly voluntary among companies. In a report published by S&P Dow Jones Indices in cooperation with RobecoSAM, they analyzed to what extent companies from the headline indices disclose information concerning ESG activities. Companies studied include constituents of the S&P 500, S&P Europe 350, S&P/ASX 200, S&P/TSX 60, S&P/TOPIX 150, S&P Asia 50, S&P Latin America 40, S&P Korea LargeMidCap, and a number of additional companies from China and India. The disclosure records were provided by RobecoSAM.
These are the key findings (the complete report is attached)
The average level of transparency of the 1,504 companies included in the assessment in 2013 was 45, which is below the 0-100 range’s mean. The average score for disclosures related to corporate governance was 81, while the average score for the environmental component was 40 and the average score for the social component was 33.
The companies in the S&P Europe 350 had the highest average ST&D score among all the other headline indices from S&P Dow Jones Indices (average score of 63). The S&P Europe 350 was also the only index in which the average scores for all three components of assessment (environment, social and corporate governance) exceeded the 50-point average level range.
The research demonstrates significant differences in disclosure levels across regions. Companies in the U.S. index (the S&P 500),the Canadian index (the S&P/TSX 60) and the Australian index (the S&P/ASX 200) had veryhigh scores for disclosures related to corporate governance. However, their scores for disclosures of environmental and social components were much lower than those of Europe’s largest companies. European companies led in transparency on environmental and social issues. Companies in the Korean and Japanese indices, the S&P Korea LargeMidCap and the S&P/TOPIX 150, respectively, had high scores for disclosure of the environmental component, average scores for social component and the weakest of all scores for corporate governance-related disclosure.
Scores for disclosures of environmental and social components were correlated. This implied that for most companies, it was rare that a company disclosed information about the environmental aspect of its business but did not disclose information about the social aspect (and vice versa). This correlation does not apply to disclosure scores for corporate governance. In other words, a company’s decision to disclose information about corporate governance is independent of its decision to disclose information about social or environmental aspects of its business.
A company’s total ST&D score was strongly correlated with its market size, a relationship that applied across all geographies. So bigger companies tended to disclose more information: There was a significant correlation between a company’s size and its total ST&D score, which was clear on a regional level (see Exhibit 10). This correlation is likely explained by the fact that bigger companies tended to experience higher pressure from their shareholders and governments, so they disclosed more information. The correlation between a company’s size and its corporate governance disclosure score was generally less than the correlation between its size and scores for the other two components. This happened because the variance in scores for corporate governance was small, especially in jurisdictions where disclosure of significant parts of this information is required by the government.
Companies’ ST&D scores did not change significantly over time once they reached the 70- to 90-point range. However, ST&D scores tended to increase if they were lower than 70 and decrease if they were higher than 90.
Average scores for environmental and social components, when adjusted for changes in the scope of assessment, tended to grow over time. At the same time, scores for corporate governance generally stayed the same.
Average ST&D scores of developed countries exceeded the average ST&D scores of countries with emerging economies, but not significantly (46 vs. 40, respectively). This was most likely caused by bigger assessment penetration in developed countries. Companies from developed economies were more transparent than their competitors from emerging countries; however, the gap decreased from 12% to 6% in the period from 2010 to 2013. Countries with emerging economies were worse in terms of all components, but the difference in scores for the social component was insignificant. In 2012, developing countries were also worse than developed countries from the lens of all criteria, and the difference in scores for the social component was much greater.
The highest-scoring sectors were telecommunication services and utilities. These sectors’ profiles are likely attributable to the fact that in high-tech industries, the competition for investors’ capital is the greatest. Therefore, appreciation of shareholders’ interest in nonfinancial reporting is generally the highest.
Photo: Chris Talbot. Lucent Group Announces Opening of New UK Office
The Lucent Group, which specialises in strategic land development in high growth areas throughout the United Kingdom, is pleased to announce the establishment of a UK office in the City of Winchester, Hampshire. The office is a subsidiary of Lucent Advisors Limited, headquartered in the Isle of Man, which acts as advisor to the Lucent Strategic Land Fund.
The Winchester office is strategically located to allow the Group to take advantage of international and domestic transport links so that it can both effectively manage its expanding portfolio of projects throughout the country and also be close to the City of London institutional investor market.
The Winchester office will act as Lucent Advisor’s Project Management Centre offering asset advisory and project management services to the various projects the Group is undertaking. Its establishment comes at an exciting time for the Group.
The Allerdale Investment Partnership, a joint venture with Allerdale Borough Council, is expecting a determination on its first planning application, a 250 unit residential development, by the end of 2014. Several further planning applications will be submitted on the Partnership’s portfolio of sites in the near future.
In North Lincolnshire, work is progressing on the Lincolnshire Lakes development and a planning determination is anticipated later this year. Work is expected to start on the site in early 2015.
In Southampton, just 20 minutes away from the new office, a project team is already progressing the Royal Pier Waterfront Planning Application which will be submitted in Q1 2015. The initial round of public consultation is due to start this month.
Lucent has identified a project pipeline in excess of £50 million and is expecting to announce further acquisitions before the end of 2014.
Speaking about the new office, Chief Financial Officer Richard Quirk said “We are delighted to be opening an office in Winchester. This is an important step in our company’s evolution and underlines the importance we place on Southampton’s Royal Pier Waterfront project. The establishment of the office in the UK will provide effective support for the growing number of land projects that Lucent is bringing forward for development. Furthermore, it gives us an international hub with close proximity to the City of London.”
The Group’s administrative and broker functions for the Lucent Strategic Land Fund will remain unchanged and stay with the Isle of Man headquarters.
The Winchester office will be fully operational by the end of June 2014.
Foto: Christos Tsoumplekas, Flickr, Creative Commons. Modificación de la ley de sociedades de capital para mejora del gobierno corporativo
Morgan Stanley Alternative Investment Partners (AIP) has obtained $500 million in commitments for AIP Strategic Opportunities Fund I (SOF I), a closed-end investment fund that seeks to capitalize on medium-term opportunities in the hedge fund space. SOF I will focus primarily on hedge fund secondaries, hedge fund co-investments and other opportunistic hedge fund strategies. Mark van der Zwan and Jarrod Quigley, Managing Directors, are SOF I’s primary portfolio managers.
“We are pleased that we have achieved our fundraising goal for SOF I,” said Mustafa Jama, Chief Investment Officer of the Morgan Stanley Alternative Investment Partners Hedge Fund group. “We believe that the fund is well positioned to capture value by investing in opportunities with a two- to five-year duration. The withdrawal of traditional capital providers, such as banks and proprietary trading desks, from this segment of the market should, in our view, enable highly selective investors with patient capital to generate attractive returns.”
“Our AIP Hedge Fund group is world-class, and this successful fundraising effort marks the latest in a long string of achievements,” said Arthur Lev, Head of AIP. “The team is among the most experienced buyers of hedge fund secondaries and has access to a strong set of top-tier hedge fund managers pursuing niche opportunities in this area of the market.”
The AIP Hedge Fund group has over $20 billion in assets under management and advisement as of March 31, 2014.1 The group’s headquarters are located in West Conshohocken, Pa., with additional offices in New York and London.
Established in 2000, AIP has approximately $35.8 billion in assets under management and advisement.2
1As of March 31, 2014, Morgan Stanley AIP’s total fund-of-hedge fund assets of approximately $20.2 billion comprises approximately $12.5 billion of assets under management and approximately $7.7 billion of assets under advisement.
2As of March 31, 2014, Morgan Stanley AIP’s total assets of approximately $35.8 billion comprises approximately $28.0 billion of assets under management (AUM) and approximately $7.8 billion of assets under advisement. Approximately $1.5 billion of assets cross-invested across AIP product lines have been subtracted from the total so as to avoid double-counting. AUM is based on (i) total net asset value of its fund-of-hedge-funds managed investment vehicles and separate accounts; (ii) value of all partners’ capital accounts and investors’ invested capital, plus their respective unfunded commitments, of private equity funds of funds and private equity separate accounts; and (iii) value of all partners’ capital accounts and investors’ invested capital, plus their respective unfunded commitments, of real estate funds of funds and real estate separate accounts. The value of private equity and real estate assets under management in separate accounts not solely dedicated to private equity or real estate investments managed by the relevant team is defined as the carrying value of all private equity or real estate assets, plus unfunded private equity or real estate commitments.
MetaQuotes Software has announced that its MetaTrader 5 trading platform has entered the Brazilian market. The largest independent Broker in Brazil XP Investimentos has officially launched MetaTrader 5. This means that more than 80,000 customers of the company can now trade in the financial markets using the platform.
Importantly, traders can trade not only currency instruments, but also stocks and futures of Brazilian companies. To connect to the São Paulo Stock Exchange BM&FBovespa, XP Investimentos specialists have developed a special gateway to provide correct execution of trades and delivery of market quotes. Finally, customers of XP Investimentos can fully appreciate the benefits of stock trading with the MetaTrader 5 platform.
XP Investimentos rigorously tested the terminal prior to announce the launch of the new service publicly. “For more than 10 months, MetaTrader 5 was available only to 100 users selected for beta testing of the product. Only after the final debugging of all processes, trading with MetaTrader 5 became available to all our clients” says Guilherme Benchimol CEO of XP Investimentos.
“Interest in the South American market has recently increased,” says Renat Fatkhullin, CEO of MetaQuotes. “We are looking to expand our presence in the region. We have entered the Brazilian market with the help of the leading local broker with a large client base to instantly win a substantial market share. Thus, we achieve a higher exposure by providing MetaTrader 5 to the broad masses of traders, while our partner XP Investimentos have satisfied the wishes of their customers. We are happy to strengthen our position in the region and will continue to actively expand into the Latin American market.”
Established in 2000, MetaQuotes Software Corp. has been developing trading platforms for financial markets under the MetaTrader trademark, a leader in the Forex software market. MetaTrader trading platforms are currently used by more than 600 brokerage companies and banks all over the world. The new platform, MetaTrader 5, was developed by the Company with a focus on stock markets and is now actively promoted to various world exchanges.
Established in 2001, XP Investimentos is the largest independent broker in Brazil, with over 120,000 clients. The company is based in Rio de Janeiro and has offices in São Paulo, Porto Alegre, Belo Horizonte and New York, represented by XP Securities. XP is present in all of the Brazilian states through its distribution network – 500 affiliated offices and 1,800 authorized advisors.
Foto: Nicola Corboy, Flickr, Creative Commons. El encuentro de dos mundos
Stifel Financial Corp. announced last week a definitive agreement to acquire Legg Mason Investment Counsel & Trust Co., N.A. from Legg Mason, Inc. LMIC provides customized investment advisory and trust services, on a discretionary basis, to individuals, families, and institutions throughout the U.S. The Company’s portfolio managers manage over $9 billion in assets. LMIC will be part of Stifel’s Global Wealth Management segment.
“We are very pleased to welcome the experienced team of professionals from LMIC,” said Ron Kruszewski, Chairman, President, and CEO of Stifel Financial Corp. “The investment counsel business is a perfect addition to our existing wealth management platform. We think their high touch and personalized approach for each client’s unique financial situation perfectly matches Stifel’s model and culture. We look forward to partnering with the LMIC team.”
Harry O’Mealia, President and CEO of LMIC, stated, “Caring passionately for our clients and providing them outstanding service are the guiding principles of our organization. We are excited to partner with Stifel, which shares this vision, and believe our clients will be well served through the combination. My partners and I look forward to joining the team.”
Joseph A. Sullivan, President and CEO of Legg Mason, said, “We are very pleased that the LMIC team has found an ideal partner in Stifel’s wealth management platform to serve their clients. For Legg Mason, this transaction continues to evolve our investment affiliate lineup toward fewer and larger firms that can be better leveraged through our global distribution platform. Today, Legg Mason has six key affiliates with compelling investment expertise offered to clients around the world in a variety of investment vehicles.”
The Board of Directors of Stifel has approved the acquisition, the terms of which are undisclosed. The transaction is targeted to close in the fall of 2014, subject to customary regulatory approvals.
State Street Global Advisors (SSgA), the asset management arm of State Street Corporation, has announced five key appointments in the firm’s intermediary business, which provides products supporting wealth management professionals, including SPDR ETFsand State Street mutual funds, for wirehouses, Registered Investment Advisors (RIAs), private banks, family offices and regional/independent broker dealers. The appointments will bolster SSgA’s competency across its intermediary business, which was created in 2001 to better access the firm’s deep institutional experience and broad investment knowledge.
“These appointments enhance our capabilities and reflect our commitment to invest in ways that support advisors so they can achieve better outcomes for their clients,” said James Ross, executive vice president, global head of SPDR ETFs, and head of US intermediary distribution at SSgA. “We look forward to the teams’ contributions in providing advisors with solutions to meet the expectations of their clients by offering differentiated products and investment views that will help support their businesses.”
The recent appointments to the US intermediary business include:
Michael Arone, chief investment strategist for the US intermediary business. Mike was head of global and EMEA portfolio strategy at SSgA before this new role.
Ken Bossen, vice president and head of US intermediary portfolio strategy and due diligence. Ken joins SSgA from Morgan Stanley, where he managed the firm’s ETF model portfolio and country ETF focus list.
Robert Forsyth, vice president and head of strategic partnerships. Prior to this role, Robert was head of exchange traded products and derivatives at UBS Wealth Management.
Mario Gallotto, vice president of business intelligence. Mario joins SSgA from John Hancock Investments, where he was managing director of business intelligence.
Brie Williams, vice president and head of practice management. Brie joins SSgA from Putnam Investments where she was responsible for marketing communications in support of Putnam’s global brand and retail mutual fund product line.
Insight Investment, one of the UK’s leading institutional asset managers, has appointed Svein Floden as Head of Business Development for Liquid Alternatives in the Americas. Based in New York, he will report to Philip Anker, Global Head of Distribution at Insight. Floden will join Insight’s Business Development team and will be responsible for developing products and implementing a distribution plan for Insight’s liquid alternatives, total return and absolute return products across the Americas.
Floden joins Insight from Deutsche Bank Asset and Wealth Management where he has spent the past 14 years, most recently as Head of Hedge Fund Sales and Marketing for Wealth Management Americas and Director of Institutional Alternatives Distribution, Latin America. Prior to Deutsche Bank, Floden was a member of the Latin America group at Citigroup’s Private Bank in New York.
Philip Anker, Global Head of Distribution, Insight Investment, says: “I am delighted to welcome Svein to Insight. We have been developing our investment offering to meet the increasingly global demands of our institutional and wholesale clients. Svein’s wide-ranging experience in building and expanding hedge fund platforms and in distributing alternative investment products in this region will enable him to play a broad and strategic role in the development of Insight in the Americas.”
Floden says: “Insight has established an impressive reputation in the UK and Europe for delivering client- focused, outcome-oriented investment solutions. Our business is at the forefront of developing new ways of investing. Joining the team in New York as the firm builds on its franchise in the region and continues its evolution as a truly global investment business is an exciting prospect. I very much look forward to working with Philip and his team and to playing a part in the next chapter of the development of Insight.”
There was little doubt that the European Central Bank (ECB) would act at its June meeting – market consensus had expected some move on interest rates. The ECB duly delivered on rates but also unveiled a raft of additional measures.
For its part, the ECB had already indicated that it was concerned by the anaemic rate of economic growth in the eurozone, something not helped by a strong euro hampering exports and a low rate of inflation raising deflationary fears.
What we got was a credible package of measures that should nudge growth in the eurozone up a gear. The cut in the refinancing (repo) rate by 10 basis points to 0.15% is likely to have negligible effect, the cut to a negative deposit rate of -0.10% however is more convincing as it should encourage banks to lend more.
More interesting is the Targeted Longer-Term Refinancing Operation (TLTRO), which is being targeted at the real economy, i.e. businesses rather than housing or governments. Liquidity will also be boosted by the cancellation of the weekly securities market programme drain, which should inject approximately €165 billion into the system. Other measures include an extension of the fixed rate full allotment regime and progress towards buying asset backed securities.
This was an enterprise-friendly set of measures. However, the cut in rates may not go down too well with German households, which tend to hold a lot of money on deposit and will shortly be getting next to nothing in terms of interest. The sop to Germany is that a lower euro – which has fallen recently in expectation of the ECB announcements – should support Germany’s exporters. Germans will also take some comfort from Draghi stressing the need for structural reforms to continue given that progress has been uneven and is far from complete. Monetary policy alone cannot do all the heavy lifting in growing the economy.
The real risk, in my view, is that growth will remain low due to demographics and general caution. This will lead to tax receipts recovering but not enough to start repaying significant amounts of loans outstanding. However, the cost of financing that debt is now considerably lower in all countries and the cut in rates should help anchor bond yields and financing costs at low levels.
The measures taken by the ECB are helpful but as the saying goes: “you can lead a horse to water, but you can’t make it drink.” It remains to be seen whether this carrot and stick approach by the ECB can encourage lending and lift the pace of recovery within the eurozone. What is clear is that the president of the ECB, Mario Draghi, is more than willing to engage in further action if necessary, stating that they “are not finished here” if the eurozone economy fails to respond to this latest package.
By Tim Stevenson, manager of the Henderson Horizon Pan European Fund
