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.

JP Morgan is reportedly allowing its wealth management advisors to take crypto fund orders. So reports The Block Crypto.

The publication report that “orders for Grayscale and Osprey's crypto-based offerings are now on the table for wealth management advisors at the U.S.'s largest bank.”

It is important to note that the move does not signal a willingness to provide direct crypto investments, as these investments are trusts that are based on crypto asset performance. JP Morgan CEO Jamie Dimon has expressed concerns about crypto investments.

Advisors are also not allowed to present crypto-based funds, but can process orders if they come straight from clients.

Read the full article from The Block Crypto.

ForUsAll has introduced the Alt 401(k), which allows employers to provide participants with access to alternative investment options, including cryptocurrency, within 401k plans. So reports the 401k Specialist.

The company chose cryptocurrency platform Coinbase Institutional so it could offer participants access to cryptocurrency.

“By introducing the Alt 401(k), we are democratizing access to what drives wealth for the wealthy—alternative investment options, combined with our original core offering of low-cost index funds, and personalized help,” Jeff Schulte, ForUsAll’s CEO, said in a statement.

Read the full article from the 401k Specialist.

Warren Buffett is defending the $25 billion in shares his firm bought back, according to a recent article from The Wall Street Journal.

Buffet said the large buyback was done to enhance the intrinsic value for shareholders while still leaving plenty of money to pounce on opportunities. Berkshire Hathaway has $138.3 billion in cash and short-term Treasury bonds available, as of the fourth quarter.

However, Buffett did take a shot at other CEOs buying back stock. “American CEOs have an embarrassing record of devoting more company funds to repurchases when prices have risen than when they have tanked,” he wrote.

Read the full article from The Wall Street Journal.

JPMorgan strategists are calling Bitcoin an “economic sideshow” while positing the true post-COVID-19 narrative is the “rise in digital finance.” So reports Seeking Alpha.

The analysists also argue that competition between fintechs and banks is going to pick up steam as Big Tech continues to play a role as a potent digital platform for customer data access. “The report points out that financial innovation is outpacing regulation, creating an uneven playing field, benefiting fintechs as it’s easier and cheaper for them to offer similar products and services,” according to the article.

Read the full article from Seeking Alpha.

The FBI Criminal Investigative Division and the United States Securities and Exchange Commission’s Office of Investor Education and Advocacy (OIEA) warn of fraudsters swindling investors while pretending to be registered brokers or investment advisers.

In a press release, the agencies said fraudsters may falsely claim to be registered with the SEC, FINRA or a state securities regulator in order to lure investors into scams, or even impersonate real investment professionals who are actually registered with these organizations.

Fraudsters may misappropriate the name, address, registration number, logo, photo, or website likeness of a currently or previously registered firm or investment professional. They try to trick investors into believing that they are registered by using a number of tactics, including the following:

• Spoofed Websites. Fraudsters may set up websites using URL addresses or names similar to those of registered firms or investment professionals to trick investors into believing that the fraudsters are registered or that the fraudsters are affiliated with a registered firm or investment professional.
• Fake Profiles on Social Media. Fraudsters may set up profiles impersonating registered investment professionals on popular social media platforms and then message investors to solicit their money.
• Cold Calling. Fraudsters may set up boiler rooms with teams of people cold calling investors to solicit their money while claiming to be employees of registered firms. The fraudsters may use technology to make it appear they are calling from the firm’s location.
• Misrepresenting or Falsifying Documents. Fraudsters may recruit investors by misrepresenting that their firm was registered with the SEC, including pointing to the firm’s Form D filings to support the misrepresentation

Read the full press release.

“If you don’t want to get vaccinated, leave” Anthony Scaramucci told his staff. The Skybridge founder and co-managing partner recently issued the ultimatum to his staff over the COVID-19 vaccine. So reports CNBC.

“We’re a private company,” he said on Squawk Box. “If somebody wants to fight me over the vaccine mandate, that’s fine. Let’s take it to the court.”

He also encourages all eligible Americans to get vaccinated. His comments come as 49% of the U.S. population is fully vaccinated, according to the CDC.

“I don’t like the totalitarian nonsense. It’s not about that. This is about once in a while we have to team up as a society to protect each other,” Scaramucci said, according to the outlet. “If we all get vaccinated, we’re going to be out into society faster and the economy is going to grow faster, and there will be more jobs and more income.”

Read the full article from CNBC.

Despite the massive, industry-wide disruption caused by the COVID-19 pandemic, booming financial markets and significant gains in production have boosted overall financial advisor satisfaction in the J.D. Power 2021 U.S. Financial Advisor Satisfaction Study.

But not all advisors are feeling the warm glow of support from their firm. Advisors working for wirehouse firms generally indicate:

• Having significantly lower levels of support from their firm
• Greater disruption of business services
• More difficulty transitioning to remote work than do those advisors working for non-wirehouse and independent advisory firms

“Advisor satisfaction is directly linked to retention and brand advocacy, so firms that want to get the most out of their advisors need to invest in providing them with the best tools and support to do their jobs effectively under all circumstances,” said Mike Foy, senior director of wealth and lending intelligence at J.D. Power. “This year has been especially challenging, and this study identifies some firms that clearly did a better job than others in meeting those challenges.”

According to J.D. Power, among employee advisors, Edward Jones ranks highest in overall satisfaction with a score of 890. Raymond James & Associates (864) ranks second and Stifel (857) ranks third.

Among independent advisors, Commonwealth ranks highest in overall satisfaction with a score of 936. Raymond James Financial Services (853) ranks second and Cambridge (842) ranks third.

Learn more about the J.D. Power's U.S. Financial Advisor Satisfaction Study.
 

Two ex-Merrill brokers claim in a lawsuit that Black FAs at the firm were given less compensation and received fewer promotions to senior positions than their white counterparts. The lawsuit also claims Black FAs were fired more often as well. So reports Think Advisor.

Lucinda Council and Ravynne Gilmore, African American women, say Merrill engaged in discriminatory practices. Council was registered as both a broker and advisor with the firm in Paramus, N.J. until September 2019 while Gilmore was registered as a broker with Merrill in Troy, MI until January 2020. 

This is not the first time the firm has faced discrimination allegations. Merrill settled a lawsuit in 2013 with 700 Black brokers as well as a separate suit with 4,800 female advisors. In all, the settlements were for almost $200 million combined.

Read the full article from Think Advisor.

Integrated Wealth Concepts LLC in Waltham, MA, Mutual Advisors, LLC in Casper, WY and Oakmont Corporation in Los Angeles, CA are the top three fastest growing financial advisors, according to a new ranking by from the Investment Advisor Association and National Regulatory Services. So reports Yahoo! Finance.

The rankings were part of the organizations’ top 50 rankings. The report also found that younger firms are among some of the fastest growing, with six of the top 10 firms on the list having been founded in the last decade.

The report also found that growth is slower in the South, with just four firms overall on the list, and none in the top ten, from the South. The highest ranking firm from the South is Heritage Wealth Advisors in Richmond, Virginia, which ranking 19th on the list.

Read the top 50 rankings and the full article from Yahoo! Finance.

Canterbury Investment Management conducted a survey of financial professionals about the challenges they face heading into the year. Ninety-five advisors participated in the survey. So reports ETF Trends. 

Canterbury discussed one of the biggest challenges with Brent Slinkard: building a process for getting a steady stream of qualified prospects. Slinkard is a consultant to independent financial advisors. Slinkard says that everyone wants such a pipeline, but there is “no magic formula.”

“Generating quality leads requires a systematic process over time,” he says. “If you look through the optics of an investor, it is about communicating properly, informing, educating, and nurturing over time to a point where you can ultimately convert that prospect to a quality client… I assert that it is absolutely based on a systemic process that allows you to nurture leads over time and bring them in, in an intelligent way to your advisory.

Tom Hardin, Chief Investment Officer at Canterbury Investment Management, notes that when trying to retain and nurture clients “one of the biggest mistakes that advisors make is scheduling these quarterly or semi-annual meetings where they take this performance monitor, and they compare the performance of their portfolio to either an index or combination of benchmark indexes.”

He says that approach puts the client in the "left brain" where they begin to worry about the comparisons. They may even question the process if the performance lags an index in a quarter. Hardin says he focuses on the “right brain” and teaches concepts that reinforce the process.

“I want them to begin to connect me and my expertise to their dreams and their goals and make the connection that I can help them get there,” he says
Read the full conversation from ETF Trends.

David Solomon, the CEO of Goldman Sachs does not think working from home is here to stay. So reports CNBC.

Specifically, despite a number of Goldman’s employees working from home during the pandemic, Solomon said working from home is an “aberration” that “we’re going to correct as quickly as possible.” He made his comments while speaking at Credit Suisse’s annual financial services forum.

“I do think for a business like ours which is an innovative, collaborative apprenticeship culture, this is not ideal for us and it’s not a new normal,” Solomon said, according to CNBC.

Read the full article from CNBC.

This past year ushered in some changes that are likely to stick around. In fact, 60% of advisors say they plan to, or may consider, a permanent virtual/in-office hybrid arrangement for their teams, according to a new survey of 396 financial advisors by InCapital.

More than half (55%) felt their teams were, or might be, more productive working from home. They noted several key benefits of working from home:

• 65% of advisors said they had time to increase communications with clients
• 49% spent time improving how they serve clients
• 30% said they will be or are considering reducing the size of their office space
• 16% said they may eliminate office space altogether

Back to the Office

Just shy of half (42%) returned to their offices as of December 2020, while 34% expect to return in the first half of 2021. Meanwhile, 11% plan to return in the back half of the year and 13% do not expect to return at all this year.

Half of the advisors surveyed said they are waiting until the second half of 2021 or later to meet clients in person. Only 12% of advisors said they have in-person meetings with clients now, and 38% said they would in the first half of 2021.

Most (67%) said they are not concerned about how clients and prospects react to them working from home. In terms of prospecting, the vast majority (96%) said they were comfortable meeting with prospects virtually; and 67% said prospecting and selling could be done effectively via virtual meetings. In fact, 45% of advisors said they had six or more virtual prospecting meetings in 2020 with a success rate of 22%.

For more survey results, read the full press release.