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Embracing Volatility; Untangling Ownership; 2013 People and Pay: January Investment Advisor—Slideshow

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We kick off 2014 with a look at volatility and how advisors can manage it in our January issue. Ben Warwick looks at liquid alternative funds and what they can do for clients’ portfolios.

Jon Sundt also addresses alternatives this month, not just in his regular column, but in a feature on hedge funds. Over the past 65 years, hedge funds have evolved from a boutique investment for wealthy investors to sophisticated risk management tools.

We also talk to leaders at Northstar Investment Advisors about their strategy for building a firm worth transferring when an advisor is ready to retire. Finally, FA Insight offers the second installment of the 2013 People and Pay series.

Mainstream: Why Liquid Alts Are Good for Clients and Your Practice

Alternative mutual funds are enjoying increased acceptance in the advisor community. And why not? In this new risk-on/risk-off era, finding diversification in long-only products is harder than ever. At the same time, bells and whistles like liquidity, transparency and (somewhat) lower fees have made alt funds increasingly approachable.

Ben Warwick, founder and CEO of Quantitative Equity Strategies, examines why they should be considered in a portfolio; how to choose the most appropriate strategy for clients; and the attributes to look for when shopping for funds.

Read the full article.

Untangling Ownership: Succession Strategies for Firm Partners

To prepare a valuable succession plan that will take their firm into the future, advisors have to begin at the beginning and build a business instead of a practice, according to Charles Farrell and Fred Taylor of Northstar Investment Advisors. Regardless of an advisor’s exit strategy, it won’t work if he can’t detach himself from the firm.

Managing Editor Danielle Andrus examines ways advisors can build enterprise value to ensure a successful transition later.

Read the full article.

Alternatives to the Rescue?

The 2008 crisis led to lots of rethinking about finance and investing, including rethinking hedge funds and the role they can play in both institutional and individual portfolios. To wit, and contrary to their reputation, we now look to hedge funds to provide sophisticated risk management for institutions. At the other end of the scale, we see the marketing of hedge funds moving to a new level, making them more accessible to retail clients. Thanks to the introduction of “liquid alternatives,’’ a hybrid of mutual funds and hedge funds, and to less restrictive rules under the JOBS Act, investment advisors no longer have to buy expensive databases or hire consultants just to ferret out the names of hedge funds.

Jon Sundt, president and CEO of Altegris Investments, explains how advisors can adopt hedge funds in portfolios as risk management tools.

Read the full article.

Countering a Crisis in the Making: The 2013 People and Pay Study

Our industry is in near-crisis mode with regard to assuring a reliable source of its most critical input—people. Personnel costs account for three-quarters of a firm’s expenses, and compensation costs continue to rise. Advisory firms are looking to significantly expand their teams, yet the current labor pool is challenged to just provide replacements for those retiring from the business.

Dan Inveen and Sarah Pelonio examine the “2013 FA Insight Study of Advisory Firms: People and Pay” to find human capital best practices for firms of all sizes.

Read the full article.


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