Archive for January, 2013

Quilter Cheviot CIO To Chair APCIMS Committee

Nick Parmée

31 January 2013

News Analysis

Duncan Gwyther, chief investment officer of Quilter, newly-merged with Cheviot Asset Management, has been named chairman of the FTSE APCIMS (Association of Private Client Investment Managers and Stockbrokers) Private Investor Indices Committee, taking over from the recently retired Mike Lenhoff. Gwyther has been an active member of the committee for more than fifteen years.

The indices are intended to provide investors with an objective measure of performance against which to measure their portfolios. The series represents the performance for growth-orientated, income, balanced and conservative investors and incorporates returns from FTSE indices representing UK equities, international equities, fixed income, cash and investment trusts.

They can be used for reviewing the asset allocation and structure of a portfolio with fund managers or stockbrokers and as a benchmark for assessing and comparing the performance of discretionary fund managers.

Earlier this month, the UK regulator, the Financial Services Authority, approved the previously-announced merger of Quilter and Cheviot; the two businesses will retain their separate brands until later this year. Terms of the transaction remain undisclosed.

The business has total funds under management of more than £12 billion (over $19 billion), most of which comprise discretionary portfolios run on behalf of private clients, charities and trusts, pension funds, corporate bodies and life companies. For more details click here.


Thursday, January 31st, 2013 EN No Comments

Income Rises At UK’s Brewin Dolphin

Tom Burroughes
Group Editor in London

31 January 2013

News Analysis

Brewin Dolphin, the UK-listed wealth management and investment house, said
its total income in the three months to 30 January rose 13.7 per cent to £67.8
million from a year before.

The firm said the figures were a “good result against the
comparable period last year; when compared to the preceding quarter ended 30 September it is down 5 per cent primarily due to the ongoing reduction of trail
income in preparation for RDR implementation”. (The reference is to the UK’s official
Retail Distribution Review programme of reforms to financial advice.)

“The trend towards an increasing proportion of recurring fee
income is continuing, albeit at a marginally slower pace than during 2012.
Repricing and moving to new national rate cards remains on track for completion
by the end of this financial year although progress was slower than anticipated
in the first quarter,” it said in a statement today.

At the end of
December 2012, Brewin Dolphin had total managed funds of £26 billion, a rise of
0.4 per cent from 30 September.


Thursday, January 31st, 2013 EN No Comments

Baird Adds Industry Veteran To Wealth Management Business

Miller, who has 30 years of industry experience, will help recruit veteran advisors with an intent to open and manage a new wealth management office in the Northeast. He will be working from Baird’s office in St. Louis.

Most recently, Miller was a member of Wells Fargo Advisors’ senior leadership team and led the firm’s Advisor Development Group. In this role, he managed recruiting, training and development for the firm’s branch managers and financial advisors. He spent the majority of his career with A.G. Edwards Sons, Inc. where he held management positions including Executive Vice President, Director of Sales and Marketing; Regional Officer – Eastern Region; and producing Branch Manager. He began his financial services career as a financial advisor with Kidder, Peabody and Co.

‘Peter is highly regarded within the industry, and is a strong addition to our Private Wealth Management business and to Baird’, said John Mabee, Vice Chairman of Baird’s Private Wealth Management group. ‘He brings deep industry knowledge; established relationships with legacy A.G. Edwards advisors; and an appreciation for Baird’s unique culture that will help us build on the success we’ve had attracting top talent to best meet the needs of our clients’.

‘I’ve long admired Baird and couldn’t be more pleased to be joining a company whose talented associates are so committed to putting their clients’ needs first,” Miller said. “Baird reminds me of A.G. Edwards where I spent most of my career, and it feels very good to be returning to a company that has achieved the milestone of being on FORTUNE’s 100 Best Companies to Work For® list for 10 consecutive years. I look forward to helping the firm grow by sharing with others in the industry Baird’s great story, its collaborative culture, and its impressive line-up of services that will help advisors serve their clients’.

Baird has added more than 250 Financial Advisors and Branch Managers to its Private Wealth Management group since the beginning of 2009, the vast majority of whom are industry veterans. Beyond adding talent, Baird has opened wealth management offices in new markets including Portland, Maine, Salt Lake City, Fort Worth, Texas, and Portland, Ore.

Miller and his wife Debi live in St. Louis and have two adult daughters. Active in his community, he currently serves on the board of the Saint Louis Old Newsboys Day and recently served on the board of the Saint Louis Symphony. In addition, he is a member of the Investment Committee for The Meadows Foundation in Dallas.


Thursday, January 31st, 2013 EN No Comments

Apply unified standards to wealth management products, regulator says

<!–enpproperty 2013-01-30 07:42:35.0Wang XiaotianApply unified standards to wealth management products, regulator saysApply unified standards to wealth management products, regulator says1811044814Business2@usa/enpproperty–>

Unified standards and concerted regulation should be applied to wealth management products sold by non-banking institutions, otherwise risks might match those generated by banks and cause a shock this year, a senior banking regulator warned on Tuesday.

“Not only banks, but insurance and securities companies are also able to sell wealth management products, which raises great challenges for financial regulation,” said Yan Qingmin, assistant chairman of the China Banking Regulatory Commission.

Wealth management products are similar to time deposits, but the interest rates can be set freely by financial institutions, and many of the assets and liabilities stay off the balance sheets, adding to concerns over fast-expanding shadow banking activities in recent years.

These products usually require a minimum investment of 50,000 yuan ($7,900). The capital from buyers often goes into bonds, loans and company projects.

The commission also plans to further strengthen regulation over banks’ issuance of wealth management products this year to prevent risks from spreading, Yan said.

“The focus this year should be to prevent banks from operating products with different risk levels in the same capital pool, and make sure they use separate accounts for products with fixed and non-fixed income,” said Wang Yanyou, director of the commission’s Business Innovation Regulatory and Collaboration Department.

The amount of outstanding wealth management products was at about 7.4 trillion yuan in January, accounting for about 5 percent of the banking business, and the products issued last year generated an average yield of 4.1 percent, according to Wang.

He said the commission has asked banks to investigate their selling of such products for other institutions, such as trust companies, before submitting reports, and is trying to set up a unified system for the issuance of the products.

A Shanghai branch of Hua Xia Bank failed to pay promised returns to buyers of a $22.47 million wealth management product when the product matured in late November.

Fitch Ratings said earlier that the issuance of such products poses growing risks to the banking sector, as many of the assets and liabilities spend much of their life off balance sheets.

Unlike in previous years, recent issuance has been driven mainly by non-State banks, and turnover is high with about three-fourths of products maturing within six months, which adds to uncertainty of repayment, Fitch said.

Due to rising risks that most of the capital of such products was put into long-term projects and could not be repaid in the short term, in 2011 the regulatory commission ordered banks to halt sales of wealth management products with a maturity of less than a month.

The recent controversy over Hua Xia Bank’s product highlighted the rising operational risks incurred in selling some of these investment products to investors, the regulators said.

“Banks should be responsible for the sales conducted by their staff but not authorized by the headquarters,” Wang said.

The product in question was originated by a third-party investment company and was not a wealth management product issued under Hua Xia’s name, yet the bank is still being held implicitly liable.

“Authorities must be alert and prevent off-balance sheet risks from spilling over. Wealth management products are becoming invisible debt on banks’ balance sheets,” said Ba Shusong, deputy director of the Finance Research Institute at the Development Research Center of the State Council.

(China Daily 01/30/2013 page14)


Wednesday, January 30th, 2013 EN No Comments

Assets Under Management Nudge Down At UK-Listed F&C

Tom Burroughes
Group Editor in London

30 January 2013

News Analysis

Assets under management at FC Asset Management slipped
slightly to £95.2 billion ($150 billion) at the end of 2012 from £96.8 billion on 30
September, the UK-listed firm said today.

The firm logged gross third-party institutional inflows of £800
million in the final quarter of 2012, taking the total for the year to £2.9
billion, or an annualised growth rate of 12.7 per cent.

“Performance in the quarter was good in most asset
categories and revenue yields on inflows continue to exceed those on outflows,”
Richard Wilson, chief executive, said.

The firm said gross outflows from its third-party
institutional business were £1.7 billion for the quarter; this was primarily
attributable to cash management and government bond mandates of £1.3 billion.
Most of the remaining outflows resulted from £0.2 billion of property asset
realisations prior to year-end.

The consumer business experienced positive net flows of £30
million for the quarter.


Wednesday, January 30th, 2013 EN No Comments

Ask the Experts: What investment mix is best for retirement plan?

This week, Tony Bell of Bell Co. Private Wealth Management in Sacramento, answers readers’ investing questions.

I am 69 and have $400,000 to set up a retirement plan for a monthly income of about $1,500. What bond funds, mutual funds and ETFs would be good?

Creating income during retirement can be challenging and time-consuming. Generally speaking, the ideal retirement portfolio has a combination of bonds (which provide predictable fixed income); equities (which provide appreciation potential and dividend payments); alternatives (real estate, commodities, etc., that hedge inflation); and cash (the safest option).

Prior to determining which fit best in a retiree’s portfolio, the investor should first assess his/her risk tolerance in order to determine the proper allocation among bonds, stocks, alternatives and cash. In addition, the allocation should consider the current economic cycle, political climate, market performance and inflationary trends.

Another challenge when creating retirement income from your “nest egg” involves income consistency. For example, typical bonds make interest payments semiannually. This leaves the retiree with no income for 10 months a year and requires budgeting.

One way around this is to create a “bond ladder,” which is a portfolio of fixed-income securities where each security has a significantly different maturity date (due date).

The benefits of this type of investment structure are twofold. Not only is the investor afforded income “smoothing,” but by purchasing several smaller bonds with different maturity dates (rather than one large bond with a single maturity date), the investor minimizes interest-rate risk and increases liquidity.

The goal is to position your investment portfolio so that it generates responsible income, preserves principal and maintains risk equilibrium. Investors should either utilize the advice of a professional or spend time educating themselves.

Annette Thau wrote a fantastic book, “The Bond Book (Everything Investors Need to Know About Treasuries, Municipals, GNMAs, Corporates, Zeros, Bond Funds, Money Market Funds and More).” As the title suggests, it’s a great resource for most investors.

We recently changed financial advisers and are now putting away money for our grandkids in a different 529 college savings plan. Our previous fund’s quarterly statements never listed any investment costs. With our new financial adviser’s recommendation, we are investing in the Franklin Templeton 529 College Savings Plan and pay 3.5 percent each time we invest. We recently looked at California’s 529 plan, ScholarShare. The most that any of the ScholarShare plans charge is an annual 0.61 percent (most charge 0.3 percent or less). Is our 3.5 percent a reasonable fee for each monthly investment?

There are typically two ways of investing in a 529 college savings plan: Direct-sold 529 plans, which is a do-it-yourself way of investing, and institution/broker-sold plans.

The direct-sold plans (like those in California and most other states) allow for much lower management fees and are free of broker-originated sales charges, often called loads. You are solely responsible for fund selection.

When investing through your broker or financial institution, the adviser analyzes your investing time frame, risk tolerance and other needs, then makes appropriate choices for your situation.

From a cost standpoint, the 3.5 percent fee you reference is the sales load you pay each time you buy units of the chosen funds. Paying a sales load for each contribution may greatly reduce the growth potential of your account.

There is little doubt the cheapest way of investing in a 529 plan is California’s ScholarShare program, which is managed by TIAA-CREF. Just be aware that cheaper is not always better, especially if you want guidance from a financial adviser.

Ask your adviser for a detailed college planning analysis of the least expensive/most effective options. These should include a 529 plan, a Coverdell Education Savings Account and qualifying U.S. savings bonds.

– Compiled by Claudia Buck

© Copyright The Sacramento Bee. All rights reserved.

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Wednesday, January 30th, 2013 EN No Comments

BNY Mellon Expands Asia-Pacific Intermediary Distribution Team

BNY Mellon

BNY Mellon has named Eric Fu as a Managing Director within the firm’s intermediary distribution team.

In this newly created position, Fu will be based in Hong Kong and report to Navin Suri, Head of Intermediary Distribution, Asia-Pacific.

With more than 22 years of experience in leadership roles in local, regional and global wealth management and asset management businesses, Fu will play a critical role in building BNY Mellon’s distribution capability across Asia-Pacific, in line with the company’s aim to become a premier investment partner for the intermediary space. In his role, he will be responsible for developing business with key distributors throughout Asia-Pacific, and will be working closely with the product and marketing teams to deliver strong product programmes for these channels across the region.

Suri said: ‘We are building out our distribution platform across Asia-Pacific as we believe the intermediary market is going to grow steadily over the next decade. It is vital that we have the right products, channels and service in place in order to achieve our ambitions. Eric’s experience in building businesses from devising strategy through to client delivery will be a great asset in helping move our plans forward’.

Fu joins BNY Mellon from HSBC, where he most recently held the position of Head of Wealth Development, Retail Banking and Wealth Management, Hong Kong. Prior to that, he filled senior management roles with leading industry institutions, including at China Southern Fund Management Ltd as Deputy CEO and Chief Marketing Officer; and at Fidelity as business head for their Intermediary and Institutional businesses.

In addition, Fu has represented industry organizations and chaired important positions working with the regulator in driving change and industry development. He served as Chairman of the Unit Trust Sub Committee of the Hong Kong Investment Fund Association in 2008 and most recently as Chairman of the Securities Committee of Hong Kong Association of Banks in 2012. He holds an Executive Master of Business Administration degree from Richard Ivey School of Business of the University of Western Ontario.

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Tuesday, January 29th, 2013 EN No Comments

Oaktree WM launches international business

Oaktree WM launches international business

Oaktree Wealth Management is planning to launch an international division under new hire Tony Shah, who was formerly head of Towry’s international business.

The firm, run by former Wealth Manager cover stars Jeremy Arthur and Ian Brady (pictured), Invesco Perpetual’s ex-head of fund of funds, is planning to target international clients through the new business to be led by Shah. He joins from Christchurch Investment Management.

Arthur said: ‘We found we were getting a growing number of enquiries to manage money offshore for UK residents.

‘I have known Tony for many years. He followed our progress from launch and felt that because of the strength of our processes, our investment management proposition was much more suited to his clients.’

As a result, the boutique has now gained its EU permissions and is hoping to see assets boosted once the new business is established.

‘We hope it will bring us additional funds under management and the opportunity to attract clients who may be coming back to the UK but want to keep their assets offshore,’ Arthur said.

Having launched in 2008, the company now runs £75 million in assets, and is aiming to reach £350-500 million over the next three to five years.


Tuesday, January 29th, 2013 EN No Comments

Investor column: Women hold key in wealth, legacy planning

Whether nurturing children’s financial responsibility, fulfilling charitable goals or making investment decisions impacting their financial security, women are integral to establishing and preserving family wealth.

Women should be involved, informed and comfortable as guardians of family wealth. Active participation in wealth management can strengthen a woman’s commitment to protect and grow their assets to leave a legacy for their children, their community and beyond.

These strategies may help you transfer your wealth and your values surrounding wealth to the next generation:

Education leads to confidence.

Attaining financial security for you and your heirs typically requires you to accept responsibility for the management of significant investment assets. Whether single, married or widowed, seek as much education as possible about wealth planning. Even if you don’t currently make key family financial decisions, you should gain knowledge in these areas to effectively communicate with your professional advisors charged with these duties.

Use objective, qualified professionals.

Relying on competent professional advice versus family or friends is extremely important when making decisions affecting the accumulation, preservation and distribution of wealth.

What should you expect? A good wealth adviser — or professional team, such as attorneys and accountants — should offer guidance/services in most areas of wealth management, including estate planning, retirement planning, tax planning, insurance needs assessment, and college planning. A wealth adviser should work closely with you to:

n Identify areas requiring special assistance, such as creating trusts.

n Minimize taxes and planning costs.

n Develop and implement a personalized wealth management and income plan.

n Assess any financial risks you may face and develop strategies to mitigate them.

n Review your legacy plan periodically and suggest changes when needed.

Philanthropy is integral to legacy planning.

Wealth holders have a greater opportunity — or responsibility — to make charitable giving a consideration in legacy planning. Charitably inclined families may have clear goals, but they may not know where to begin.

To help choose the best strategy, work with a trusted adviser to evaluate your specific charitable wishes,

types of assets to be gifted, tax planning objectives and choices among several charitable-giving vehicles, including donor-advised funds, family foundations, gift annuities and charitable remainder/lead trusts.

Teach children the responsibilities of wealth.

Wealth opens doors of opportunity for you, your children, their children and, possibly, generations to come. Yet wealth can be a weighty responsibility that takes time to manage, maintain and preserve. If you are a parent, you may be concerned about the effects of wealth on your children’s values and how the “money” lessons you teach them will manifest as they become adults.

Family values should be held in high regard.

Family values — traits, behavioral patterns, beliefs, goals and morals shared by your family — define a family’s character as much as dollar signs measure a family’s wealth. By holding shared values in high regard and making a commitment to financial responsibility, philanthropy and volunteerism for the younger generation, you will enrich your family’s legacy for generations to come.

Karin Grablin, CPA, is with SRQ Wealth Management, 1819 Main St., Suite 905, Sarasota; 941-556-9004.


Tuesday, January 29th, 2013 EN No Comments

Wealth manager sees ‘big inflows’ from IFAs

Wealth manager Brewin Dolphin said it had made significant inroads into the financial adviser market in the run-up to the RDR in 2012.

Rob Burgeman, director of investment management at Brewin Dolphin, said that the firm had received “big inflows” from advisers last year.

Mr Burgeman said: “Our proposition has been well received by the intermediary community in the run up to the RDR who welcome our experience and integrity when dealing with their business.

“The difficult market conditions of the past few years have focused minds on the key question of specialisation.”

Brewin Dolphin’s annual results, for the year ending September 30 2012, showed that the “most significant rise” in its funds under management came from its discretionary business, which grew 16.7 per cent to £18.2bn.

The firm’s overall funds under management for the same period rose by 7.9 per cent to £25.9bn.

The growth comes as Brewin Dolphin has continued to expand its research capability of direct European equities, as well as extending its research coverage of exchange-traded funds (ETFs) to cover 15 ETF providers of both synthetic and physically replicating tracker funds.

The firm currently offers 22 European stocks in specific areas that investors could not access through UK companies, such as EADS.

Ed Salvesen, deputy head of equity research, said that the expansion of Brewin’s European direct equity coverage was a slow process but that the firm had seen a pick-up in demand from clients for direct exposure in the past six months.

The wealth manager also expressed its hope that the growth of low-cost ETF provider Vanguard in the UK would trigger a price war in ETFs, lowering the costs close to the levels seen in the US, where annual management charges can dip below 0.1 per cent.

The firm said that if Vanguard could charge fees as low as 0.1 per cent for a FTSE tracker then iShares, the dominant market leader after the BlackRock subsidiary’s acquisition of Credit Suisse’s ETF business, would struggle to justify its existing fee levels in spite of its size and liquidity advantage.


Monday, January 28th, 2013 EN No Comments