In July, the U.S. stock market demonstrated remarkable strength, as the S&P 500 continued its upward trajectory, securing its fifth consecutive positive month and achieving its longest streak of monthly gains since August 2021. Additionally, the Dow Jones Industrial Average witnessed its largest two-month gain since November 2022, and within the same month, it tied a record with an impressive 13 straight daily gains. Not to be outdone, the Nasdaq Composite also excelled, marking its fifth consecutive month of growth and best 5-month stretch since September 2020.
Overall, July’s gains served as the cherry on top of what has already been a strong year for equities. The outstanding performance was backed by encouraging economic data and robust earnings reports, further solidifying investors’ confidence.
On July 26, the Federal Reserve announced a 25bps rate hike at the end of its two-day policy meeting, bringing the targeted federal funds rate to 5.25-5.50%. This rate hike brings the benchmark borrowing costs to their highest level in more than 22 years. Fed Chair Jerome Powell stressed that the central bank is seeking proof that inflation is “durably down” and will make their decisions “meeting by meeting based on the totality of incoming data”. Powell emphasized that current economic conditions will likely require monetary policy to be more restrictive for longer until the committee is confident that inflation is coming down sustainably to their 2% target. The next FOMC meeting is September 19-20.
Small cap stocks helped led the rally during the month with the Russell 2000 Value recording its best 2-month stretch since November 2022. We continue to see abundant opportunities in small to mid-cap stocks, given the compelling valuation of the Russell 2000 Value, which currently trades at only 10-12x earnings. This stands in stark contrast to the broader market, which hovers closer to 20x earnings, representing one of the biggest deltas we have ever witnessed.
M&A was bolstered by deals that made significant progress in gaining regulatory approvals. Microsoftdefeated the U.S. Federal Trade Commission’s attempt to block it’s $73 billion acquisition of videogame maker Activision, and the U.K. CMA reversed course and is working with Microsoft to find a deal structure that would satisfy its competitive concerns. The spread to the $95 deal price narrowed considerably and the companies extended their merger agreement and effective increased the deal price by allowing Activision to pay a $0.99 per share pre-closing dividend. VMware and Broadcom secured approval from the European Commission and provisional clearance from the U.K. CMA for their $85 billion deal, the parties still need U.S. and Chinese approvals. L3Harris Technologies secured FTC clearance to acquire rocket engine maker Aerojet Rocketdyne for $58 cash per share ($5 billion) and the deal closed on July 28th. We are heartened to see companies successfully defending the merits of their transactions despite regulatory objections.
July saw a continuation of the risk-on environment and the convertible market moved higher, bringing YTD returns into double digits. The rally was driven by some positive earnings reports along with expectations of a soft landing in the U.S. as inflation moderated. Balanced convertibles led the way in what was another broadly positive month. Fund performance was in line with the global market for the month with some of our equity sensitive holdings leading the way in our portfolio. We still see opportunity in a balanced convertible portfolio. While the market continued a risk-on stance in July, investors are right to be wary of certain returning to previous highs. Convertibles offer a risk adjusted way to participate in this market.
New convertible issuance stalled this month as many companies focused on reporting earnings. We are still on track for a better year of issuance than we saw in 2022. Issuance this year has generally been attractive with higher coupons, lower premiums and more asymmetrical returns than are available in the secondary market. We have continued to see companies buying back convertibles in a transaction that is accretive to earnings and positive for the credit.
Opinion article by Michael Gabelli, Managing Director and President of Gabelli & Partners.
Global Predictions, powering the next generation of economic decision-making, today announced that PortfolioPilot is officially a Registered Investment Advisor regulated by the U.S. Security & Exchange Commission (SEC).
“Securing SEC registration for our AI financial advisor marks a huge milestone for the company and instills a new level of user confidence in our platform,” said Alexander Harmsen, CEO of Global Predictions. “We are committed to empowering self-directed investors to make smarter investment decisions by building hedge fund caliber investment solutions and making them accessible to everyone.”
The company has gone through reviews and implemented a rigorous compliance program with ongoing audits in accordance with the SEC’s stringent compliance guidelines. This compliance, the heightened level of oversight, and fiduciary responsibility strengthen PortfolioPilot’s ability to be a trusted companion for self-directed investors looking for personalized, automated recommendations.
PortfolioPilot distinguishes itself from human financial advisors with its ability to provide genuinely personalized investment advice for self-directed investors. Leveraging AI and the company’s Economic Insight Engine, a proprietary modeling and forecasting system, the platform analyzes the user’s entire net worth to provide automated recommendations, portfolio insights, and an AI assessment to identify critical areas of improvement and highlight economic factors most impacting their portfolio.
PortfolioPilot introduces three new features: Portfolio Overhaul is a one-click, automated, and comprehensive process that reviews and adjusts the user’s existing portfolio based on various factors like risk tolerance level, investment goals, and macroeconomic conditions.
In addition, Fee Optimization provides a clear picture of the annual fees, including expense ratios, transaction costs, and management fees, to help understand the cost of impact on investment returns. In addition, offers cost-saving recommendations, including lower-fee alternatives with similar risk/return and strategies to reduce transaction costs.
Third and finally, AI Equity Search – Assists users in discovering investment opportunities in the market to generate alpha. Based on the user’s search query, the tool will analyze vast amounts of data and generate a shortlist of stocks or ETFs that meet the criteria.
The Securities and Exchange Commission adopted new rules and rule amendments to enhance the regulation of private fund advisers and update the existing compliance rule that applies to all investment advisers. The new rules and amendments are designed to protect private fund investors by increasing transparency, competition, and efficiency in the private funds market, the statement said.
“Private funds and their advisers play an important role in nearly every sector of the capital markets,” said SEC Chair Gary Gensler. “By enhancing advisers’ transparency and integrity, we will help promote greater competition and thereby efficiency. Consistent with our mission and Congressional mandate, we advance today’s rules on behalf of all investors — big or small, institutional or retail, sophisticated or not.”
To enhance transparency, the final rules will require private fund advisers registered with the Commission to provide investors with quarterly statements detailing certain information regarding fund fees, expenses, and performance, the SEC stated.
In addition, the final rules will require a private fund adviser registered with the Commission to obtain and distribute to investors an annual financial statement audit of each private fund it advises and, in connection with an adviser-led secondary transaction, a fairness opinion or valuation opinion.
To better protect investors, the final rules will prohibit all private fund advisers from providing investors with preferential treatment regarding redemptions and information if such treatment would have a material, negative effect on other investors. In all other cases of preferential treatment, the Commission adopted a disclosure-based exception to the proposed prohibition, including a requirement to provide certain specified disclosure regarding preferential terms to all current and prospective investors.
In addition, the final rules will restrict certain other private fund adviser activity that is contrary to the public interest and the protection of investors. Advisers generally will not be prohibited from engaging in certain restricted activities, so long as they provide appropriate specified disclosure and, in some cases, obtain investor consent. The final rules, however, will not permit an adviser to charge or allocate to the private fund certain investigation costs where there is a sanction for a violation of the Investment Advisers Act of 1940 or its rules.
To avoid requiring advisers and investors to renegotiate governing agreements for existing funds, the Commission adopted legacy status provisions applicable to certain of the restricted activities and preferential treatment provisions. Such legacy status will apply to those governing agreements entered into in writing prior to the compliance date and with respect to funds that have commenced operations as of the compliance date.
Insigneo announces that Insigneo Securities, LLC and Insigneo Advisory Services, LLC have entered into a definitive agreement to acquire the Latin American consumer brokerage and investment accounts of PNC Investments, PNC Managed Account Solutions, and PNC Bank.
PNC will retain the deposit and loan accounts of customers with brokerage assets and assets under management moving to Insigneo and will continue to support the U.S. banking needs of their international clients. This strategic move represents a significant milestone for Insigneo as it further solidifies its position as a leader in the independent wealth management industry, the firm said.
With this acquisition, Insigneo will be opening new offices in Texas and expand its capabilities to serve a broader Mexican client base, while adhering to its mission of delivering exceptional client service, enabled by state-of-the-art technology, and driven by continuous innovation, the company added.
“The acquisition of PNC’s Latin American brokerage and investment operations further cements Insigneo’s position in the Americas as a leader in international wealth management,” said Raul Henriquez, Chairman and CEO of Insigneo Financial Group. “We are committed to the region with our strategy of empowering investment professionals to deliver excellent service and compelling investment strategies and solutions to clients globally”.
The acquisition is expected to close in the coming months.
In line with Vontobel’s ambition to drive the next stage of growth in the US, Vontobel SFA is expanding its Business Development team. Claudia Ruemmelein and Hansjuerg Raez are joining SFA as Senior Business Developers in the Miami and New York offices on September 1, 2023.
“Together with our ongoing efforts in the US, we believe that this integral next step will enable us to deliver on our strategic ambition, further build out our client base and service our partners and clients more effectively”, the firm said.
The Business Developers are the first point of contact for UBS financial advisors in the US, who continue to recommend SFA to their clients looking to diversify their assets internationally and thus offer tailored investments in Switzerland.
The important responsibility of the Business Developers is to maintain and expand our collaboration with UBS financial advisors, keep them informed about the Vontobel SFA offering, and reliably provide advice and support. The team, which includes employees in Zurich, New York and Miami, is to be expanded to around 10 experts over the next years under the leadership of Patrick Schurtenberger.
Hansjuerg Raez
Claudia will be based in Miami and brings more than 15 years of experience in the financial services industry, with a successful track record of building and developing new business in the Asset Management and Private Equity sectors. She joins us from Mesa Capital Advisors, where she covered Latin American institutional and UHNWI/Family Office clients investing in alternative investments.
Prior to that, she held various roles at First Avenue Partners, Apollo Management and PriceWaterhouse Coopers in New York, London and Frankfurt.
Hansjuerg will be based in New York and also brings more than 15 years of experience in the financial services industry. He joins us from UBS AGNew York, where he was responsible for multinational corporate clients and the expansion of that business for the last nine years.
Prior to that, he was at Trafigura in Stamford, Shanghai and Lucerne in various roles. Hansjuerg holds a bachelor’s degree in Business Administration from the University of Bern, Switzerland.
Achieving a portfolio under management of USD 500 million of high-net-worth families in a short period of time is not easy, considering the aggressive competition among firms and colleagues visiting the same clients and offering the same products. The elements that can differentiate us are what determine success or failure.
Over the years, we have overcome international and regional crises that have made us experts in how to protect and increase wealth in the face of changes that occur.
But now, the challenge is greater, because we not only have to face the post-pandemic economic changes, including changes in consumer behavior, but also the management of the inflationary phenomena and global interest rate hikes.
Additionally, we are facing a change in our industry, not only due to the arrival of AI (Artificial Intelligence), but also because major firms are migrating their strategies, and advisors are caught amid this chaos.
Therefore, we must make decisions thinking about our plan for the next 10 years, both for ourselves and for our clients.
Analyzing the situation:
a) Many large firms have shifted their focus from “putting their clients first” to ceasing service to those who are not their primary market… without prior notice, or clear future expectations.
b) There are many parameters to analyze, and everything is based on who your clients are: individual or institutional, country, size, sophistication in investments, with or without banking services (credit cards, transfers, loans); and whether your approach is comprehensive, supporting your clients with their assets and efficient planning and organization of their wealth, or if you prefer to only focus on their investments.
c) Clients demand personalized, flexible, and prompt attention; many “large” firms become bureaucratic and when their focus is not on the client, they lose their responsiveness, either relying on machines or on newly advisors focused on promoting “combo” portfolios that often do not meet the complex profile and needs of the client.
d) Advisors understand the clients’ “preservation profile“: strong jurisdictions in which to diversify with properties and financial assets held in well capitalized firms, with diversified portfolios seeking high income and capital growth, taking advantage of market opportunities within their profile (which is generally more conservative than established… when corrections occur) and therefore managing their assets accordingly, as trusted individuals with whom we have weathered various storms together. Our clients seek captains who know how to navigate and reach the destination.
e) We know where their money comes from, and it truly gives us a unique opportunity to respect their work, admire their achievements, and understand the dynamics of our clients, their families, and businesses in order to plan for intangibles – what is more important: the potential 20% market correction which generally recovers over time, or a family going through a divorce and “losing” 50% of their assets? Or an international client in the US with a personal investment account potentially losing up to 40% of their portfolio above USD 60,000 in US securities due to inheritance taxes? (*IRS info). It is part of our work, along with other professionals, to plan with companies, trusts, and other tax-efficient structures.
f) To preserve wealth, we involve future heirs so that they are aware that investment accounts are the funds generated and not spent over many years by their predecessors, along with the compounding effect (* Rule of 72 info), e.g., a portfolio doubles at 7.2% annual rate every 10 years). This way, when they receive them, they don’t “gamble” with them or spend them with their “new” friends.
g) Providing tools is always more educational than giving away, and for this purpose, there are strategies such as borrowing against the family portfolio (so they develop their projects with the discipline of having the obligation to repay); a strategy that is also used to acquire properties in a tax-efficient manner or support local businesses while maintaining the medium to long-term investment portfolio. It is also good for them to learn how it works because diversification and “time in the markets” are the only secrets to financial success.
Considering this description of the context, we must ask ourselves:
At what point in your life are you…
Do you have the resilience to be a “soldier of your firm”, following orders to “close your clients’ accounts” in exchange for receiving the clients of the colleague who dares to take the step, or to retire? Or do you have the energy to be loyal to your clients to do all the work of establishing their accounts again and understand that there will be surprises along the way with the clients themselves, your colleagues, or the new firm or structure you choose?
Think about the future and try to understand who you want to work for in the next 10 to 15 years: a firm, your own firm, or clients? Your current clients or those who take the step with you (and truly value you)? New clients, markets, team, or strategic alliances?
The feeling that is generated when a partner or client accompanies you is tremendous and generous; they are there for you, just as you have been there for them… and naturally, you will take care of them, their children, and referrals.
It would be expected that the relationships built on years of effort and hard work surpass temporary separations of months (due to compliance with protocols and sector-specific rules).
According to a Wealth-X report, high net worth clients often follow their investment advisors when they decide to switch firms. This is due to the trust and experience that they have developed with their advisor over the years. The report also highlights that client loyalty to the investment advisor outweighs loyalty to the firm itself. Additionally, a survey conducted by PwC reveals that 64% of high-net-worth clients consider the personal relationship with their financial advisor as an important factor when choosing a wealth management firm.
Speaking of motivation, if one is recognized in the industry, besides choosing wisely and going where one feels better, you can “capitalize” on the change, and the work is very well rewarded…
A very personal article, as a Portfolio Manager, a market researcher, and with my own convictions… the same beliefs that led me to enter 2022 with over 30% of my clients’ USD 500 million in cash because I anticipated interest rate hikes and cash along with a small proportion in alternative investments (properties) was the only thing that could protect them.
And, as someone dedicated to my clients, recognized by Forbes, Working Mother, Women We Admire-Miami, and even being congratulated in Times Square… now, anticipating the events and adapting to the new reality, I have stepped out of my comfort zone to search, compare, and find the best place for my clients, a “boutique-style within one of the best capitalized financial institutions in USA with extensive resources,” or as my clients say, “we went from Rolex to Patek Philippe.”
Therefore, considering the question “should I stay, or should I go?”, and in order to grow, check the following points:
The significant growth in wealth management by boutique firms, as indicated in the Wealth-X report, also highlights that boutique firms have been successful in attracting high-profile clients such as successful business owners, institutional investors, and affluent families. This is due to their ability to quickly adapt to the changing needs of these clients, offering tailored solutions and high-quality personalized service, particularly in markets emerging and growing economies.
The increasing demand for online financial services and mobile applications by clients.
The increase in investment in North American firms. Additionally, the importance of understanding tax and legal regulations in both countries and properly preserving money in an efficient tax structure.
The search for estate planning services and investment in real estate in the United States.
Clients’ preference for responsible investment and strong personal relationships based on trust and tailored to cultural needs.
And, I will share my thoughts on strategy at this moment: position your cash… remember that in the last two decades there have only been high interest rates a couple of times, and therefore, considering the decrease in inflation, among many other variables, I believe that interest rates will decrease in the coming years; based on that, I suggest increasing the fixed income investments in your portfolio’s asset allocation, targeting yields of at least 5% with a conservative mix of securities such as fixed-term deposits – CDs (FDIC-insured certificates of deposit), as well as investment-grade bonds. It’s also time to extend the duration and increase maturities to maintain high cash flows and potential appreciation (you can stagger maturities for liquidity if needed). For additional income, growth, and currency diversification, consider including funds & ETFs (Exchange Traded Funds), which for emerging markets (bonds and stocks) are a good way to better protect principal, thanks to diversification and tax efficiency – at least, ‘offshore’ offer to international clients.
In conclusion, taking into account these considerations supported by reliable reports and sources, remember the words of Warren Buffett: ‘It takes 20 years to build a reputation and only 5 minutes to ruin it,’ as it will help you make the right decision.
Whether it’s staying with your current firm, moving to another firm, becoming independent, changing sectors, or even taking a break or retiring… It’s time to make that decision with courage, conviction, and triumph. Keep soaring high and enjoy the journey while continuing to be the best version of yourself.
Frederick Shaw, Country Head – United States at Apex Group
Apex Group announces the appointment of Frederick Shaw as Country Head – United States, responsible for overseeing the delivery of Apex Group’s single-source solution to clients in the geography.
Shaw brings two decades of experience in the financial services industry, joining Apex Group from private markets investor, Hamilton Lane, where he held the role of Chief Risk Officer and Global Head of Operations.
During his tenure, Shaw led teams overseeing the company’s domestic and international regulatory compliance and risk management frameworks along with its global operations complex. Prior to joining Hamilton Lane in 2011, Shaw held senior compliance and operational roles in international banks and alternative asset management.
In his new role, Shaw will oversee Apex Group’s rapidly expanding US business, which now employs over 600 people across 15 local offices.
The Group’s domestic US clients, as well as international clients investing into the US, benefit from the efficiency of a single-source solution, including access to a broad range of services including Digital Banking, Depositary, Fund Raising Services, and pioneering ESG Ratings and Advisory Solutions, offered globally and delivered locally, the firm said.
In addition to strong organic growth, Apex Group has also recently completed the integration and rebrand of theacquisition of Greenhough Consulting Group, bolstering its corporate and business services offering for funds and corporates, the company added.
Shaw will work closely Apex Group’s experienced regional leadership team, including recently appointed Group President, Samir Pandiri, Georges Archibald, Chief Innovation Officer and Regional Managing Director, Americas and Elaine Chim, Global Head of Closed Ended Products.
Georges Archibald, Chief Innovation Officer and Regional Managing Director, Americas, comments: “We are thrilled to welcome an executive with Fred’s knowledge and outstanding market reputation to our senior leadership team. His extensive buy side experience will provide valuable insights into the requirements of our current and future clients and enable us to further enhance their operational efficiency and performance. Fred shares our commitment to maintaining regulatory standards while embracing new ideas and approaches as we evolve to become the service provider of the future.”
Frederick Shaw, Country Head – US adds: “I am excited by the opportunity to join Apex Group, drawing on my client-side experience to drive continued service excellence, innovation and growth for clients. Apex Group has successfully disrupted the US market, as an independent provider of a compelling single-source solution which supports the entire value chain of a business. I look forward to playing a part in the business’ continued success, by leveraging Apex Group’s technology and solutions to better address the priorities of our clients.”
The COVID-19 pandemic has impacted us in numerous ways, setting off a cascade of dramatic changes to our lifestyles, and amid the unique circumstances of the lockdown environment, many turned to pets for companionship. The American Pet Products Association estimates that pet ownership increased from 56% of households in 1988, to 67% in 2019 and 70% post pandemic, mostly driven by millennials. Dogs comprise 57% of pet ownership, followed by cats at 27%.
Households across the U.S., Europe and Asia are shrinking due to a combination of lower birth rates, delayed marriages and overall rising costs of living and having children. In the U.S., for example, the average number of people per household dropped from an average of 3.5 in the 1960s to roughly 2.5 by 2020. As family formation has taken a back seat, and as many employees were told to work remotely during the pandemic, many millennials have chosen to have “fur babies” over children, especially during the COVID-19 pandemic. According to census data as of July 2019, millennials have overtaken baby boomers as the largest generation with 72 million members, and they experienced the highest increase in pet ownership among all age groups.
Millennials (born from 1981 to 1996), as well as Gen Z (1997 to 2013), are also the age groups that are most likely to consider their pets to be part of the family. Their desire to humanize their pets means they’re more willing than any other age group to spend a larger portion of their incomes on keeping their pets healthy and happy. More important, these two age groups are also expected to own roughly 60% of U.S. dogs by 2025, exceeding the pet ownership of the boomer generation. We believe this increase, and these age groups’ stronger attachment or “humanization” of their pets, will together provide a durable tailwind for the pet sector for many years to come. As seen below, Morgan Stanley predicts an acceleration to an 8% compound annual growth rate for U.S. pet expenditures by 2030, one of the largest rates of return in any retail segment.
In addition, while emerging-markets countries such as India, Mexico, China and Brazil are currently lagging developed nations in pet ownership per capita, there is broad-based growth. In fact, according to a pet industry report by Bloomberg Intelligence, the global pet industry is expected to reach $493 billion by 2030, representing a drastic 54% increase from current levels. Although the U.S. will likely continue to be the largest market, emerging markets countries are also expected to deliver growth due to under-penetration of packaged dog food. Under-penetration and premiumization should continue to drive the largest consumables segment, while the basic need for pets to eat reduces cyclicality.
With a growing number of Americans regarding their pets as essentially a member of their family, the “pet humanization” trend has spawned an explosion of new businesses that focuses on providing better pet nutrition and care. Pet “parents,” especially in the developed world, have become increasingly educated about pet diets, and they are willing to devote more of their hard-earned money on premium, natural or branded pet foods. The “premiumization” of pet food has accelerated in popularity, particularly among millennials, who are more willing than other age groups to make financial trade-offs here and invest in their pets’ health.
More to the point, U.S. millennial consumers are moving away from highly processed and lower-quality dry food (i.e., kibble) to pet foods that are minimally processed or so-called “raw” or “gently cooked” with human-grade ingredients. Gourmet-level dog and cat food is one of the fastest-growing areas in the pet food market due to its superior nutrition and lack of additives. Fresh pet food is believed to provide benefits like more energy, shinier coats, less stinky breath and healthier skin. Moreover, for consumers, cost seems to matter less and less in today’s landscape.
The premium pet food category appears to be one of the last areas where consumers are making “trade-down” decisions — that is, where they are willing to substitute for cheaper products — even despite high inflation eating away at household incomes. And once pet parents find high-quality foods that work for their pets, they’re unlikely to switch. As a result, pet food — and especially premium pet food — is proving to be one of the most resilient areas compared to other spending categories. As seen below, the price elasticity of the pet care category, which includes pet food, is almost as inelastic as those of baby food.
Lastly, adoption and acceleration of e-commerce have helped further bolster the pet food sector. Pet food e-commerce was already growing at a healthy pace before the pandemic, but digital paths to purchasing pet food have gained even more traction in recent years. Carrying home heavy boxes of dog food, or other pet products, like cat litter, isn’t appealing. And pet owners, especially those in the younger generations, are seeing the value of online shopping as well as direct and auto-shipping to their doorsteps. According to a 2021 report from Packaged Facts, pet food e-commerce will account for 55% of total U.S. pet food sales by 2025. That is up from approximately 30% today, above the 20% average for all U.S. retail.
The culture shift around pets has helped propel a rising demand for natural and premium pet goods. We believe the pet food industry is one of the most recession-resistant defensive plays, but also a structural growth story in the market.
Analysis by Mustafa Arikan, equity research analyst for Thornburg Investment Management.
Wipfli, a top 20 advisory and accounting firm, published the results of two industry surveys from the wealth management and asset management sectors to gain insights into their current economic challenges and how they’re positioning themselves for long-term market stability.
Ongoing rate hikes, uncertain market performance, geopolitical tensions, and increased competition all contribute to overall cautious economic predictions in both the new State of the wealth management and State of asset management industry reports.
“Our research indicates common themes uniting wealth management and asset management firms’ priorities,” said Anna Kooi, financial services and institutions practice leader at Wipfli. “Employee retention and recruitment, client engagement, and technology integration are all crucial for future success, and firms have to balance budget allocations and investments in each area appropriately.”
Both wealth management and asset management firms anticipate shifting economic times ahead, with 62% of wealth management firms and 72% of asset management firms expecting a U.S. recession in the next 12 months. Accordingly, the majority of survey participants for each industry estimate conservative market growth of five to eight percent over the next 12 months (55% wealth, 65% asset). Less than a third for both industries anticipate standard growth of eight to ten percent.
Recruiting top talent and implementing technology are key concerns for both industries. About two-thirds of both industries (66% wealth, 69% asset) list employee recruitment as one of their top concerns, and asset management firms note that talent management is their most important strategic focus. Also, asset management firms are ahead of the curve in recognizing how technology can assist and automate tasks for employees, while wealth management firms are also focused on new client acquisition and cultivation.
“Wealth management firms need to focus on targeted strategies that will help them foster long-term stability and viability,” said Paul Lally, wealth and asset management industry leader, principal at Wipfli. “In today’s uncertain economy, it’s critical for firms to adapt and constantly reassess their growth strategies.”
For example, most wealth management firms surveyed listed new client demographics as a key priority, but the majority also reported making no changes to their client acquisition strategies. In addition, offering employee flexibility was seen as key to addressing recruiting concerns, yet 64% of wealth respondents also expected employees to work in the office five days a week. Workplace flexibility and increased employee benefits will be key for firms to attract new talent, and wealth management firms should ensure that their growth plans align with their overall goals and initiatives to avoid contradictions in their strategies.
Asset management respondents are experiencing a massive shift in how technology is applied in their day-to-day operations. Three-quarters of asset firms surveyed named “managing and implementing change” as the top factor driving their goal achievement. With the onset of industry-changing technologies like artificial intelligence enhancing their work, asset management firms know they are on the precipice of a new era.
“Asset management firms recognize the important role technology will need to play due to the ever increasing complexity of investment opportunities and client demands.” said Ron Niemaszyk, partner for Wipfli’s wealth and asset management practice. “New and older generations of clients are increasingly comfortable with technology, and expect firms to provide a level of reporting on metrics well beyond that of monthly returns. Investors are now looking for insights into their portfolios’ risks and exposure to ESG initiatives. Firms who begin offering this type of reporting now can establish an edge in client acquisition over less progressive competitors.”
Technological integration is transforming how wealth management and asset management firms do business. In both industries, some firms are already using technology to support more efficient client onboarding and account management processes, as well as using data analytics to inform business decisions. Eighty-three percent of asset management firms are using business analytics to support data-driven decisions, and 58% of wealth management firms have increased their use of analytics in key business strategies.
The wealth management survey was based on responses from 102 wealth management firms across 28 states, and the asset management survey had 99 firms respond across 31 states. Both the State of the asset management report and the State of the wealth management report can be found on Wipfli’s website.
Ocorian has strengthened its financial crime and anti-money laundering support for clients with a key appointment. It has promoted Joe French to Managing Director and Head of its Financial Crime and Consulting Services.
Joe French is promoted to his new role having previously worked for Ocorian’s Newgate Compliance Limited for over six years. His experience includes 13 years with HM Revenue & Customs leading intelligence teams which developed domestic and international criminal and civil cases in relation to money laundering, fraud and cyber-crime. Prior to this he worked for the Financial Conduct Authority, after starting his career with Royal Bank of Scotland.
This comes as recent international research with more than 130 family office professionals, commissioned by Ocorian, said growing regulatory pressures are a key driver behind 91% expecting their outsourcing to grow over the next three years.
Ricky Popat, Director – Regulatory & Compliance at Ocorian said: “Joe’s appointment and our growing financial crime team emphasises our focus on excellence in this area. We know that many clients including family offices struggle to source regulatory support, so we’re delighted to be able to enhance our services to clients with particular emphasis on digital assets.”
Joe French added: “Regulatory demands are increasing rapidly across all jurisdictions and businesses often find it difficult to ensure they remain compliant on a continuous basis and financial crime is a major focus for regulators worldwide. I’m excited to be part of a growing team at Ocorian who can offer clients the very best advice and continue and to supporting clients with pragmatic and flexible solutions building on the wide range of services provided by Ocorian.”
