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.

Robinhood said it will beta launch its cryptocurrency wallets in mid-January. So reports Bitcoin.com

The trading platform said 1.6 million people have signed up already. In September, the company first unveiled its crypto wallet project, which will allow customers to trade and send cryptocurrencies using its app.

During the alpha phase of the crypto wallet, a small group of customers provided feedback on the wallet’s first iteration.

Read the full article from Bitcoin.com.

Ritholtz Wealth Management and WisdomTree have partnered to launch the RWM WisdomTree Crypto Index. So reports Think Advisor.

The firms are promoting it as the first index-based crypto separately managed account. They say is it “designed to provide retail investors, via a financial advisor, access and diversified exposure to cryptoassets.”

Onramp has licensed the index. When the index launched, it was made up of Bitcoin (36%). Ethereum (20%), and 11 other crypto assets (4% each).

Read the full article from Think Advisor.

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.

What can RIAs learn from the healthcare industry about swift adaptation to change? It is no secret that the COVID-19 pandemic forced sweeping changes in almost every sector of American society, from home life to workplace practices.

The financial advisory sector was no exception and applying the lessons learned will continue at RIAs nationwide for some time, according to Forum Financial Management. But no industry was affected as directly, immediately or completely as the healthcare sector. The potential lessons are many, but here are three topics that certainly deserve careful consideration as RIAs move forward.

Tip 1: Technology Will Drive Industry Capability

How many of us had never heard of Zoom before the spring of 2020? As offices and other workplaces nationwide instantly shifted to the remote paradigm, we learned that to meet client needs, we had to shift to online delivery of services and at the same time maintain the personal touch that clients value so deeply.

In what ways can you replatform delivery of products and services? Now that the remote workplace has become even more entrenched in our routines, smart use of evolving technology will likely become more crucial to success, not less. This includes not only Zoom and other online communication systems, but other technologically driven advising, back-office and compliance solutions. Being able to trust your technology will be ever more central to your ability to focus your energies on the client interactions, whether face-to-face or virtual, that you depend on for growth.

Tip 2: Strategic Mergers and Other Alliances Will Continue

Jacqueline LaPointe, in a January 13 column for Xtelligent Healthcare Media's Revcycle Intelligence, reports that the pandemic "confirmed the 'strategic rationale' for healthcare mergers and acquisitions." She further states that, according to healthcare advising firm Kaufmann Hall, M&A activity in the healthcare sector in 2020 "highlighted the need for hospitals and health systems to focus on core business strengths, address infrastructure gaps through partnerships and strengthen intellectual capacity."

Here again we can see echoes in the RIA sector, as independent advisors seek opportunities for strategic synergies and collaboration to maintain growth and delivery of better outcomes for more clients. According to data from investment bank and consulting firm DeVoe & Company, 2020 was a record year for M&A in the financial advising sector, the seventh consecutive year in which this was the case. Escalating valuations, the changing advisor demographic and historically low interest rates have all combined to create a fertile environment for M&A activity in the industry.

Tip 3: Building Diverse Teams Is Not Just a Growth Strategy—It Is a Survival Strategy

In a June column for MedPage Today, Naprisha Taylor reflects on the ways that diversity helped the healthcare industry come together around the goal of mitigating the effects of the pandemic and delivering care during perhaps the most disruptive public health event in history.

She commented, "The record-speed development of COVID-19 vaccines was achieved in large part because diverse perspectives came together across countries and across disciplines to scale their collective impact." Taylor goes on to assert that diversity makes for stronger teams and better problem-solving, due to the presence of a broad range of views, knowledge, experiences and perspectives.

The implications for the financial services industry seem clear. If advisors want to evolve and increase in relevance, they must prioritize diversity among their internal and external stakeholders.

Zoe, a digital wealth planning platform that connects clients with interest-aligned financial advisors, was awarded Nerdwallet's 2022 Best Online Financial Advisor.

Nerdwallet's Best-Of awards started with the purpose of giving clients the tools to take control of their money and their financial decisions. Winners are selected by a group of over 48 writers and editors who have years of experience in equipping clients with more objective information to make the right money moves.

Zoe's mission is to make wealth creation tailored and convenient through exceptional client experience and innovative technology.

Read the full press release.

Jamie Dimon, CEO of JPMorgan Chase, threatened to fire New York-based employees of the bank who are not vaccinated. So reports CBS News.

Dimon said unvaccinated workers can't enter its New York City headquarters, and do not have the choice to stay unvaccinated and work remotely. Dimon has been a big proponent of bringing workers back to the office.
He said “we're not going to pay you not to work in the office.” Most (97%) of staffers based in the firm’s New York City headquarters are vaccinated.

The rule is not a blanket one for employees across the country due to different rules in different cities and states.

Read the full article from CBS News.

Morgan Stanley inked a deal to take over office space currently serving as a headquarters for BlackRock employees, according to sources. So reports Bloomberg.

Morgan Stanley will lease the approximately 400,000 square foot space at Park Avenue Plaza, at 55 E. 52nd St., for 15 years, according to a source. BlackRock is relocating to Hudson Yards in 2023.

The lease is one of the largest in the city since the start of the COVID-19 outbreak. Morgan Stanley bosses have repeatedly emphasized the importance in-office interaction among its employees.

Read the full article from Bloomberg.

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.