SMA Managers of the Year; Building a Business With Talent: April Investment Advisor—Slideshow

The dividend story has been retold many times, but just because we’ve heard it before doesn’t make it a bad tale. In fact, the winners of the 2012 SMA Managers of the Year have used dividends to great success. This year’s winners tell their success stories to Editor in Chief John Sullivan in the April issue of Investment Advisor.

The industry’s shortage of young talent is another story we’ve heard a lot about, but Eliza De Pardo and Dan Inveen of FA Insight apply their typical analytic take on the problem in the third installment of the People and Pay series.

The India story once was one of high growth potential, an impressive GDP rate and enormous investment opportunity, but today investors are cautious and particular about where they put their money. Savita Iyer-Ahrestani’s feature ponders what happened and what’s next in India.

Calm, Cool and Confident

The one thing seen among all of this year’s SMA Manager of the Year winners?

“Dividend yield,” says Gib Watson, Prima Capital’s president and CEO, which probably doesn’t come as a surprise, given the desperate search for income in this slow-growth world.

This is the eighth year Investment Advisor has teamed with the Denver-based research firm to announce the best SMA managers in multiple categories. Prima looks for repeatable and sustainable processes in the products and managers they choose. Winners must have at least $200 million in assets and have tenured management of at least three years. There are 13 factors that the analysts consider, including performance, firm, people, process, style, customer service, tax efficiency and composite.

This year, the field of talent was so strong, multiple winners were chosen in some categories. John Sullivan sits down with the winners to get the secrets to their success.

Read the full article.

Building a Talent Hothouse

With just two associate advisors available to replace every three lead advisors, creeping compensation costs for advisory positions, and woefully low levels of succession planning, the demand for top talent is outstripping supply. Combined with a dramatic experience gap separating today’s most senior lead advisors from other advisory firm positions, the 2011 FA Insight People and Pay survey provides strong justification for enhanced development of homegrown talent.

The industry’s talent shortage is an old phenomenon that is re-emerging as a central issue. As independent advisory firms recover from the 2008–2009 security market downturn, ensuring a steady supply of qualified labor is once again a critical factor for business sustainability. The good news for advisory firms is that a solution is close at hand, but with one key proviso: Firms must create an environment where talented people can flourish. Eliza De Pardo and Dan Inveen break down the results of their survey in the third installment of this series.

Read the full article.

Reconsidering Reverse Mortgages

Times were tough for Dorothy Ariail back in 1977 when she became a young widow with three children. A schoolteacher on a tight budget, she put her children through college using a line of credit on her house in Charleston, S.C. Now she is an 80-year-old semi-retired grandmother with two sons and a daughter who are college-educated professionals—and she’s still using real estate to manage her finances.

Mrs. Ariail owns several houses inherited over the years, and she has taken out a reverse mortgage on one of them. Her loan, a home equity conversion mortgage (HECM), is insured by the federal government and serviced by Generation Mortgage Co.

While Dorothy Ariail is happy with her reverse mortgage, the product is often seen as an overpriced retirement income vehicle of last resort for distressed seniors. In fact, advisors typically avoid recommending them to their clients, and following Wells Fargo’s and Bank of America’s exit from the reverse mortgage market in 2011 due to worries about rising defaults, the product has come under an even greater cloud of suspicion. Joyce Hanson explains some concerns and benefits associated with reverse mortgages.