Financial advisors often promote their services by saying that they can help remove emotions from investing. In theory, advisors can use a variety of risk management tools, knowledge of capital markets, and long-term investing perspectives to help their clients avoid making costly knee jerk reactions.

Brexit is just one example, but it can be a powerful case study for advisors seeking to help clients understand why emotions should be curtailed by financial professionals who are armed with capital markets expertise.

In the months leading up to the Brexit referendum, markets climbed and declined in response to changing expectations for how the country’s citizens would vote. In the final days before the vote, investor sentiment strengthened as pundits increasingly said a vote in favor of the U.K. pulling out of the European Union was unlikely.

Many investors had previously feared that Brexit would hinder economic growth in Europe and create a challenging environment for U.S. companies and business in other countries that sell products in the continent.

Indeed, Brexit is likely to mean that U.K. will have to forge new trade agreements with individual members of the European Union and is likely to have to do the same with U.S. exporters.

When the Brexit referendum surprisingly determined that voters want to leave the U.K., panic ensured. On June 24, when the results were released, U.S. equities dropped approximately 3%. It was the worst single-day decline for the S&P 500 in nearly a year and wiped away the index’s gain for 2016, according CNBC.

By the end of June 27, the index had dropped 4.07%. The decline, however, was only temporary. Indeed, during the last three days of June, the S&P climbed 4.95% and, as of July 8, had generated a total return of 4.21% year-to-date.

Investors who panicked by selling in the days immediately after Brexit are likely to have sold during a dip, only to miss the strong returns when equities bounced back. With that in mind, advisors should explain to their clients that panic selling often results in selling low and then missing out on the strong returns that typically follow market dips.

They should explain, furthermore, that using portfolio diversification to cushion declines, maintaining a long-term perspective, and understanding the role of corporate fundamentals can go a long way in helping investors avoid panic selling.

Advisors should develop illustrations that show how having a mix of asset classes could have reduced the impact upon a portfolio of the post-Brexit market decline and that portfolio rebalancing may have resulted in buying equities during the market dip.

They should also show index performance numbers that illustrate how riding out historical market declines, including the correction associated with the Great Recession, would have allowed investors to recoup losses and then eventually achieve additional gains.

Finally, advisors should point out that corporate fundamentals don’t justify a major prolonged market correction. While overall corporate earnings in the U.S. have taken a hit due to cheap oil, many industries, such as Information Technology, are experiencing strong sales and improving profits.

Innovation, meanwhile, is allowing companies like Amazon.com and Netflix to rapidly grow their earnings by disrupting traditional business models with technology. At the same time, corporations are holding near record levels of cash, which is allowing them to buy back stock, launch dividends, and conduct mergers and acquisitions at near record levels.

All of those actions provide additional support to stock prices. The U.S. economy is also likely to support corporate fundamentals. While U.S. economic growth has been slow, many developments are encouraging, with the labor market strengthening, real estate values increasing, and consumers’ finances improving.

Collecting Social Security early can help retirees assess how much they can spend because the payments are consistent. So reports Wealth Management.

Also, proponents of waiting typically point to the 8% payment increase you get for delaying the payments. However, the nominal annualized reture when waiting a year is less than 8% and retirees will miss out on a full year of payments. 

Lastly, collecting Social Security may be more attractive than withdrawing money from an IRA when considering taxes.

Read the full article from Wealth Management.

The Securities and Exchange Commission recently awarded a whistleblower $3 million for information that helped the regulator crack a complex case of fraud. So reports ThinkAdvisor. The program was established more than three years ago and has paid out more than $50 million to whistleblowers.

Read the full article from Think Advisor.

Robert Renshaw has joined Edison, N.J.-based Fountainhead Capital Management as senior financial strategist. So reports TapintoEdison.

Fountainhead Managing Partner Marc Rock says Renshaw’s strength involves understanding each client’s unique circumstances and partnering with the appropriate team members to create customized strategies.

Read the full release from TapintoEdison.

Wells Fargo analyst Douglas Beath said the death of the traditional 60/40 diversified portfolio is “greatly exaggerated.” So reports CNBC.

In fact, Beath noted it could be on its way to double-digit returns after a rough 2022 so far. Wells Fargo suggests that a 60/40 strategy should return 6% annually over the next decade.

“The historical returns of stocks and bonds, combined with more attractive valuations after the recent downturn plus long-term CMA projections, indicate to us that the 60/40 portfolio is alive and well and that it should continue to serve as a solid foundation for long-term investors,” Beath notes.

Some have argued that the 60/40 approach has “reached its expiration date” and are recommending different strategies.

Read the full article from CNBC.

Jamie Dimon, CEO of JPMorgan Chase, recently provided comments on the economy in the firm’s recent quarterly release—and it doesn’t sound promising. So reports CNBC.

Dimon notes that the economy continues to grow and that the job market and consumer spending remain healthy. However, he also warned that “geopolitical tension, high inflation, waning consumer confidence, the uncertainty about how high rates have to go and the never-before-seen quantitative tightening and their effects on global liquidity, combined with the war in Ukraine and its harmful effect on global energy and food prices are very likely to have negative consequences on the global economy sometime down the road.”

Read the full article from CNBC.

James Gorman, CEO of Morgan Stanley, said that while the chances of a recession have grown to 50%, he doesn’t expect the economy to fall “into some massive hole over the next few years.” So reports CNBC.

Gorman said that it may be a “bumpy” ride for a while, and that the Fed waited too long to raise rates, but that he believes it will eventually get inflation under control.

Jamie Dimon, CEO of rival JPMorgan has said he thinks there is a “hurricane” ahead. However, Gorman says that he doesn’t see a “deep or long recession.”

Read the full article from CNBC.

Bitcoin’s recent beating has left it below its fair price, giving it “significant upside,” according to JPMorgan Chase. So reports CNBC.

In a recent research note, JPMorgan says Bitcoin is undervalued by 28%. Strategist Nikolaos Panigirtzoglou said the recent crypto market correction “looks more like capitulation relative to last January/February.”

The research note is significant because of CEO Jamie Dimon’s previous comments on cryptocurrency. Dimon has previously said he thinks Bitcoin is “worthless” and that he has no interest in it.

Read the full article from CNBC.

Leonard David Bernstein, 90, who was fired from Morgan Stanley on July 1 after he shot his business partner in their Oklahoma City office, has died.

Bernstein was accused of fleeing the scene after shooting Chris Bayouth multiple times with a .380 caliber handgun. Bernstein and Bayouth had been business partners for about nine months, but Bernstein’s health had recently been declining and he’d agreed to move his accounts to his partner.

“At the end of Leonard’s long and exemplary life, he unfortunately struggled with mental health issues,” notes an online obituary.

The cause of death was not released, but the police told ThinkAdvisor that it is “not investigating the death as anything criminal in nature.”

Bernstein is survived by his second wife Dianne, who he married in 1983, and her two children (who he accepted as his own) as well as his three children from his first marriage.

Former financial advisor Raymond A. Erker was sentenced to 22 years in prison for scheming at least 54 investors. So reports Fox 8.

Erker was convicted for ripping off investors in a $9.3 million Ponzi scheme. Erker sold clients investments he said were annuities and senior secured notes. He claimed these investments provided a guaranteed rate of return and carried no risk.

Instead, Erker and his codefendants sent the clients’ funds to their personal bank accounts as well as entities they controlled. As new investors unknowingly entered the scheme, Erker used those funds to give previous investors their “returns.”

Read the full article from Fox 8.

The Financial Planning Association said it will push for the term “financial planner” to have a legal definition, which would require individuals using the designation to meet certain standards. So reports Financial Advisor.

This multi-year effort, if successful, would also help protect consumers. Currently, anyone can call themselves a financial planner.

The group did not provide many details about its push to carve out a legal definition for the title, but did say it does not expect to introduce any legislation until 2024. The group’s chief executive did say it is open to either a federal approach or a state-by-state approach.

Read the full article from Financial Advisor.

Stephen Straus, an 88-year-old financial advisor with Stifel, Nicolaus & Co. was killed in the July 4th mass shooting in Highland Park, Illinois. So reports Advisor Hub.

Six others were killed and many injured when a gunman, perched atop a building, opened fire on a holiday parade.

Straus, a vice president at the Chicago area firm, was a “gentle, warm hearted” man and an “ambassador of the office,” according to firm CEO Ron Kruszewski. Cynthia Straus, Stephen’s niece, wrote on Facebook that this was a “tragic, senseless loss” and that “NO ONE should die this way.”

Read the full article from Advisor Hub.

Merrill Lynch added 93 “experienced advisors” in the second quarter, triple the number it added in the first quarter, according to its president Andy Sieg, the president of Merrill Lynch Wealth Management. So reports Advisor Hub.

The quarter’s tally marks the largest addition of experienced financial advisors since 2010. Sieg expects the hiring momentum to continue, or accelerate, throughout the year.

Read the full article from Advisor Hub.

Last year Edward Jones launched a pilot program to allow brokers to share office space. Now, the company has indicated allowing brokers to team up is coming, breaking with its longstanding solo practitioner model. So reports Advisor Hub.

By the end of 2023, each of the firm’s 19,000 advisors will be able to team up with another advisor to share a branch office. The firm is also testing allowing veteran brokers to add a junior partner.

A company executive overseeing branch development said that teaming “enables our branch teams to stay competitive and deliver on the complex needs of our clients and investors more effectively.”

Read the full article from Advisor Hub.

There have been many columns written about how millennials have rejected financial advisors in favor of self-directed platforms. But that’s not completely accurate. So reports U.S. News & World Report.

Many millennials may indeed be utilizing self-directed platforms, but that doesn’t mean they are rejecting financial advice. In fact, many may both need and be looking for financial guidance. A recent survey by the National Association of Personal Financial Advisors (NAPFA) found that many millennials feel underprepared for retirement and this is due to inadequate financial guidance.

It would be more accurate to say millennials are rejecting the traditional role that financial advisors have played for generations, says Brian Stivers of Stivers Financial Services. Investment strategies have evolved and advisors need to as well. It can be as simple as virtual meetings, or developing e-tools.

Advisors also need to be articulate their value to millennials. And they need to remember many millennials have never experienced a real market crash.

Read the full article from the U.S. News & World Report.

New research from Robert Half finds that 56% of U.S. companies have experienced pay compression in the Last 12 months. Of those, 62% are increasing salaries for current staff to help close wage gaps. Robert Half Salary Guide features data to benchmark compensation for 500-plus positions.

"Market conditions have shifted dramatically, and savvy employers are stepping up to address salary gaps and ensure all employees are being paid fairly," said Robert Half senior executive director Paul McDonald. "They know that taking a cautious 'wait-and-see' approach on compensation is risky and can lead to the loss of great talent."

There are several factors at play when it comes to wage growth, and employees' expectations are among them. In a separate survey of more than 1,000 U.S. workers, one-third of respondents (34%) said they have not had a raise in 12 months and another 16% received one but were disappointed with the amount.
In addition, nearly two-thirds (62%) plan to ask for a raise this year, with the top reasons being:

1. To adjust for the higher cost of living (30%)
2. To reflect current market rates (23%)
3. To account for additional job responsibilities (22%)

If workers don't get a raise:

• 31% will ask to revisit the salary conversation in a few months
• 27% will look for a new job with higher pay
• 23% will ask for more perks

In addition to setting competitive salaries, companies must consider the entire employee experience and deliver programs that satisfy their professional and personal needs,” McDonald says. “Career advancement and remote options are two big priorities for workers today."

Read the full release from Robert Half.