Wealth managers are examining all kinds of issues as they continue to push for growth while markets and the economy stabilize. We hear a lot about advisors’ issues and concerns here, and thought a list of what’s buzzing around the wealth management industry would be useful.
Borrowing from David Letterman, we give you our “Top 10 Things That Have Wealth Managers Buzzing.”
Philanthropy—it’s not just fundraising and writing checks anymore; wealth managers are helping clients to be more effective donors or hands-on philanthropists. Foundations, non-profit organizations and donor-advised funds are adopting business best-practices:
- Run like a business, using influence for social impact
- Use performance metrics
- Developing strategic long- and short-term goals and plans
- Philanthropists are traveling to actively provide aid
- Investment advisors have opportunity to run the endowments or assets in some cases, so there’s more retention of assets under advisement
#9 Municipal Sustainability
U.S.municipalities—and their bonds—have been slammed by lowered tax bases and poorly-advised investment schemes. Some, though, may have a chance to go green and earn revenue, like one in Italy, “Tocco da Casauria,” reported by The New York Times to be using wind power to go green while, at the same time, funding municipal services. Would this work here?
- Green investing
- Municipalities own and harvest energy from solar fields or wind turbines
- Some towns use the revenue in lieu of taxes
- Can this save some municipalities in America?
#8 Connection Between the 'Flash Crash' and Fund Flows?
Equity fund outflows continued in September, according to Morningstar. The SEC noted investors started pulling out of equities in the spring; how much of that was due to the “Flash Crash?”
- Sept: $16.3 billion out of equities “despite the best September for stocks in 71 years.” Taxable bond funds—inflows of $23 billion
- Q3 2010: U.S. equity funds lost almost $43 billion; $600 million into international stock funds
- Trailing 12-months: $80 billion out of U.S. equity funds; $34 billion into international equity funds
#7 Hedge Funds – SMAs
A new Pershing study, “The Growth of Separately Managed Accounts in the Hedge Fund Industry,” showed that 80% of hedge funds in their study are offering separately managed accounts (SMAs). Investors (who still pony up a big initial investment) like this because of:
- Lower fees
#6 Alternative/Hedge Strategies in Mutual Funds