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.

Many financial advisors have kept crypto at arm’s length, but investor demand may push reluctant FAs to work with the assets, according to a new Cerulli report. So reports CNBC.

Almost half (45%) of FAs expect to use crypto in the future due to client requests, according to the report. Currently, only 7% are using cypto because they recommended it, while another 10% are using crypto because clients asked for it.

Senior Cerulli analyst Matt Apkarian said that if “advisors aren’t including [crypto] or at least having some sort of stance on it, then they’re placing themselves at a disadvantage and could potentially lose clients over it.”

Read the full article from CNBC.

In a recent memo, Morgan Stanley said it plans to launch an ETF platform later in 2022. So reports CNBC.

It is hiring Goldman Sachs’ Anthony Rochte as Global Head of ETFs and BlackRock’s Allyson Wallace as Global Head of ETF Capital Markets to help lead the platform.

The “first class ETF platform” will help the firm to match its “world class investment capabilities with the diverse set of investment vehicles our clients increasingly demand.”

Read the full article from CNBC.

Prominent economist Nouriel Roubini is warning of six economic and financial risks from the conflict in Ukraine. Roubini shares his view in a column on Project Syndicate.

The risks he outlines include:

A global stagflationary recession: Roubini says this scenario is now highly likely. “Analysts are already asking themselves if the Fed and other major central banks can achieve a soft landing from this crisis and its fallout,” he writes. “Don’t count on it.” He says the war in Ukraine will “trigger a massive negative supply shock” to the world’s economy, which will reduce growth and increase inflation even further. The biggest impact will be felt in Russia and Ukraine, followed by Europe. However, the U.S. will feel pain too.

Limited ability for damage control: A deep stagflationary shock will make it harder for central banks to do damage control. If they slow interest-rate hikes to support growth, “slower policy tightening could accelerate the de-anchoring of inflation expectations, further exacerbating stagflation.” However, if central banks grow more hawkish, “the looming recession will become more severe.”

A new-old problem: The West can’t count on fiscal policy to counter the “growth-dampening effects” of the war in Ukraine. Many used most of the tactics in their arsenal to combat the impact of the pandemic. “We are facing a negative supply shock in a world where inflation is already rising and well above target.”

Read Roubini’s full post on Project Syndicate.

Crypto has been a hot topic with financial advisors and clients in 2022. Here are some trends financial advisors may want keep an eye on in 2022, according to a recent opinion piece published in Coindesk.

Advisor tech

Redtail Technology CEO Brian McLaughlin says there will be “a lot of stuff coming in the financial space that will be focused on crypto.” New technology will make it easier for advisors to keep clients in their sphere of influence.

Shifting public sentiment

UX Wealth Partners CEO Kyle Wiggs said the public’s opinion of digital assets is shifting. He says that economic trends could bring about new interest crypto. “If inflation continues, if we get three rate hikes or more this year, if we continue to pump more money into the financial system, it will start to become a real thing for advisors, and if they don’t embrace it, crypto becomes a real threat to their business,” he says, according to the article. “Clients want exposure; if you don’t offer it in a simple and compelling way, they will take a percentage of their portfolio and go elsewhere.”

Blockchain and the metaverse

Dan Eyre, CEO of BITRIA, says blockchain technology is “leveling up the fundamental infrastructure that the world operates on, and in the process, you have a lot of centralized mechanisms being disintermediated across all of those spaces.”

Eyre is also watching the metaverse, which represents “a step forward in the ways humans learn, store and share information potentially as profound as the advent of the internet. Yet even as the metaverse is born, many advisors are still debating whether to offer tokens like bitcoin and ethereum to their clients and wondering if cryptocurrency is right for their businesses.”

Read the full article from Coindesk.

Wells Fargo Advisors has told clients that financial advisor Robert Brian Watson, who left Wells Fargo in April, is dead. The only problem is he is very much alive and practicing from his Atlanta office as an independent broker at oXYGen Financial, which is affiliated with Kestra Financial. So reports Advisor Hub.

Wells sent a letter to clients eulogizing Watson and introducing them to a new Wells advisor, Arthur Sinkler III. The letter noted they are “saddened” by Watson’s death and that he will “be missed by all.” The letter said Sinkler is “fully committed to continuing Brian’s legacy serving your investment needs.”

The article noted Sinkler was not likely involved in drafting or sending the note.

Wells Fargo apologized, saying the letter was “an unfortunate mistake.”

Read the full article from Advisor Hub.

Vlad Tenev, CEO of Robinhood, said the firm is cutting 9% of its workforce. So reports CNN.

The layoffs are to reduce duplicate roles and eliminate unnecessary layers of complexity following a period of massive growth in headcount, according to Tenev. Since the beginning of 2020, Robinhood’s ranks have grown from 700 to 3,800 workers.

Read the full article from CNN.

Former Merrill Lynch adviser James Iannazzo has been ordered to complete a rehabilitation program following a meltdown in a smoothie shop that resulted in his arrest and firing. So reports Bloomberg.

The rehab assignment places him under supervision for a year and, once completed, will allow him to avoid a criminal conviction. Iannazzo has also been ordered to donate $500 to the Office of Victim Services.

Iannazzo had earlier been charged with a hate crime—"intimidation based on bigotry or bias, breach of peace and criminal trespass”—for throwing a smoothie at a teenage employee at Robeks and calling her a “f—ing immigrant” amid an expletive-filled rant.

Iannazzo picked up a smoothie earlier in the day, only to return to the shop later to confront its employees. He claims he was given a smoothie that sent his 17-year-old son to the hospital with “life threatening anaphylactic shock” despite telling the staff about his son’s peanut allergy. The staff says Iannazzo asked for no peanut butter in the smoothie, but did not mention the allergy.

Iannazzo later issued a statement saying, in part, that he deeply regrets his actions and was “out of my mind with fear” because of his son’s hospitalization.

Iannazzo had been with Merrill’s wealth management group since 1995, and his LinkedIn profile says he was a managing director at the firm, according to the article.

Read the full article from Bloomberg.

Ramy Hany Mounir Fahim, an employee with Pence Wealth Management, an LPL Network firm, has been charged with crimes that could result in his execution.

Fahim’s LinkedIn profile says he is a Research Associate with Pence and joined the firm in November 2021.

The 26-year-old man has been charged with special circumstances murders for stabbing his co-worker, Griffin Cuomo, to death and then stabbing his co-worker’s roommate, Jonathan Bahm, to death in their Anaheim apartment. Cuomo and Bahm were both 23 years old. The special circumstances of lying in wait and multiple murders make him eligible for the death penalty.

“These young men were just starting to live out their dreams and find their places in the world. But an intruder who stalked them and then slashed them to death in their own home interrupted those dreams,” said Orange County District Attorney Todd Spitzer. “The callous way that two young lives were ended cannot be ignored and we will do everything we can to ensure justice is served.”

Read the full press release from the Orange Count District Attorney’s office.

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. 

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.