Archive for May, 2014

Waterstone Private Wealth Management celebrates anniversary with Boots …

Boots and Bowties photo

Boots and Bowties photo


Posted: Saturday, May 31, 2014 3:54 pm

Waterstone Private Wealth Management celebrates anniversary with Boots Bowties

From Tara Vreeland on behalf of Waterstone Private Wealth Management


OWASSO — With Oklahoma charm, dapper western wear, and mouth-watering BBQ, Waterstone Private Wealth Management said “thank you” to the Owasso community at their 15th anniversary party. The “Boots and Bowties” event, held May 17 at the Bailey Education Foundation, honored the community Waterstone calls home.

Owners Melanie Hasty-Grant and Ken Grant, say it is the financial company’s goal to help people achieve their life dreams financially.

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Saturday, May 31, 2014 3:54 pm.


Saturday, May 31st, 2014 EN No Comments

Sir David Arculus likes a challenge, so at 67 he has entered the world of wealth …

“We eventually sold IPC at quite a large profit and the bonds had to be bought
out at 110p in the pound so I made a very nice profit on it thanks to Yogi.”

To repay that friendship, Sir David will become chairman of the business and
an investing partner. Sir David agreed to take on the role a year ago, and
has spent the past three months gaining regulatory approval from the
Financial Conduct Authority, which, given he stood down as chairman of
broker Numis Securities just a few weeks ago, was not overly taxing.

Hassium’s bread and butter is discretionary wealth management for a select
group of around 25 high net worth clients, as well as investor consulting
and acting as an expert witness in third-party disputes.

Sir David jokes that although he won’t quite be going through his Rolodex to
bring in clients, “there may be a few introductions coming in. I haven’t
started knocking on doors yet”.

“The most important thing is governance. As you get bigger, you’ve got to have
proper governance,” he says. His role will be to build out the board and the
firm’s advisory panel — current members are largely ex-Goldman associates of
Dewan — and to help Dewan organically grow clients.

“Why would we want to buy anybody else’s clients? We wouldn’t,” says Sir
David. “Frankly if you bought somebody else’s clients they wouldn’t be happy
as they had the relationship with somebody else. The whole concept of the
personal approach is really important in wealth management, as you’re
dealing with families and people who want the wealth to cascade down.”

Sir David is, however, critical of the wider wealth management industry. “It
is an incredibly fragmented industry. Even the big banks will have 5pc
market share or something like that. I think the weakness all the big banks
have had is they ended up pushing their own product at the clients and the
clients naturally got pretty suspicious.

“I think the wealth management business has lost its way at the big firms.
They’re basically selling products to people and have short time horizons.
That’s not a criticism of any particular firm — it’s just the way the
industry is set up at the moment with the banks.”

The advantage Hassium has, he says, is that as it’s not tied to any products,
it can just “cherry pick” from different providers.

Although new to wealth management, Sir David is no stranger to financial
services. As well as Numis, which he chaired for five years, he sat on the
board of Barclays from 1997 to 2006, a role which he says he got by
circumstance rather than experience.

During his time at Emap — where he rose from corporate planner in 1972 to
group managing director until his exit in 1997, in which time it grew to
become a media powerhouse, with more than 500 magazines and a large
exhibitions business – he found out that McLaren Publishing was being sold
by United News and Media.

“But they hadn’t signed the deal with the prospective buyer, and I found out
that the boss of McLaren had gone off on the Great Britain power boat race,”
he says.

When the race was over, Sir David was waiting on the quayside, and offered him
£1m more to buy the business. Emap ended up buying it for £10m – which he
admits was rather more than its market value at the time – despite having no
financing in place at the time the deal was clinched.

“Barclays were absolutely wonderful to me,” he explains, with the branch
manager in Peterborough where Emap was based, referring him to the regional
manager, who agreed to the financing over the course of a weekend. “A little
time after that Barclays were looking for a non-establishment non-executive
director and they just knocked on my door and said, ‘Would you be

“I couldn’t believe it … it was sheer happenstance. I had not had a career in
banking, and here it was, pretty much one of the biggest banks in the world,
wanting me to be on its board. Emap was capitalised at £20m at the time, it
was a pretty tiny company.”

He looks back fondly on his time at Barclays, and acknowledges he was lucky to
stand down, in accordance with corporate governance guidelines, some two
years before the financial crisis hit.

“I do regret so much of what’s happened in the banking industry in the last
few years. I think everything has got more short-term. It got more
short-term from about 2004 onwards, from then everyone was concentrating
more on their bonuses and payback in the next year,” says Sir David. “It
wasn’t just Barclays, it was all the banks that were like that and I think
there had to be an adjustment.”

Despite the resetting of much in the banking world, he still believes more
change is necessary. “I think the guys in the banks still haven’t got it,
the people on the board might, but there’s still enormous pressure for
bigger salaries, bigger bonuses, this kind of stuff. Banking and the whole
financial industry has become a little disconnected from the rest of the
population, I’m sorry to say.”

Sir David has held key boardroom seats in a string of major companies,
presiding over a series of major “bumps in the road” as he calls them, both
good and bad. Although stepping down as chairman of Severn Trent in 2004,
events at the water company came back to haunt him two years later when a
regulatory and Serious Fraud Office investigation led him to stand down as
deputy president of the CBI. But he had success at O2, where the share price
under his chairmanship rose from 40p in 2003 to 201.5p when it was sold to
Spain’s Telefonica three years later in a £17.7bn deal which he notes
proudly is still the largest all cash deal ever completed in Europe.

Following his exit from Numis, his remaining public company role is as a non-executive
director of Pearson, the Anglo-American publisher which is owner of the
Financial Times.

As well as City life, he has also “given back”, as he puts it, sitting on the
boards of the British Library and Cranfield University, and having chaired,
from 2002 until 2006, the Better Regulation Task Force, under Blair. There
he lists his achievements as bringing in the “one in, one out” rule for red

Although this has since been surpassed by Michael Fallon’s “one in, two out”
rule, he says his achievement shouldn’t be underestimated.

“I did get quite a lot of flak as people on the Right of the Conservative
Party said, ‘You must take two, or three, or four out’, but I sowed the
seeds for it, and Tony Blair supported it.” He also penned a report for
Cameron ahead of the 2010 election, but since then has stayed away from any
formal interaction in the political sphere, albeit admitting he has spoken
to Francis Maude, Ed Balls and Danny Alexander each “once or twice” about
issues of business and regulation.

Instead, Sir David says he prefers to spend his time with smaller companies.
He points to ShortList Media – the publisher of free magazines such as
Shortlist and Stylist – which he started with a few friends seven years ago,
and in which DC Thomson took a majority stake last year.

He is also investing his own money into start-ups such as FMFX, which matches
foreign exchange sellers with buyers.

“Having chaired quite a lot of big companies, I would say that I quite like
chairing small companies because you can influence those a little bit more
directly,” he says. “I’m 67 so do I want to take on the chairmanship of a
big bank at 67? I probably don’t. I’d sooner do something smaller that’s
interesting and challenging. I’m a business builder basically.”

Hassium’s Dewan must be hoping some of Sir David’s magic touch might rub off.


Saturday, May 31st, 2014 EN No Comments

Halbert Wealth Management Releases Online Investment Education

These online videos are designed to educate investors on the basics of different investment products, as well as to give them a better understanding about investing in general. The easy-to-follow videos explain many of the concepts of investing in a way that is simple to understand.

Austin, Texas (PRWEB) May 31, 2014

Halbert Wealth Management (HWM) is pleased to announce its series of investor educational videos is now available on its website. This includes Stocks 101, Bonds 101, Drawdowns or Losses and Convertible Bonds 101.

These videos are designed to educate investors on the basics of different investment products, as well as to give them a better understanding about investing in general. The easy-to-follow videos explain many of the concepts of investing in a way that is simple to understand. Also available is a Financial Literacy Test to measure your financial savvy.

Click here to access these free educational videos.

HWM President and CEO, Gary D. Halbert, noted, “We’ve seen that there is a need for a resource like this that helps educate investors about the markets and the products they are currently invested in, or considering in the future. We are happy to provide the public with these free videos to help investors make more informed choices.”

About Halbert Wealth Management, Inc.: HWM is an SEC Registered Investment Advisor located in Austin, Texas. HWM’s underlying investment philosophy is that individual investors should be able to enjoy the same advantages as those enjoyed by large institutional investors such as foundations, endowments and pension funds. These sophisticated investors recognize the need to diversify into alternative strategies that actively manage assets rather than simply buying and holding.

Since 1995, HWM has offered clients access to a wide spectrum of specialized money managers representing a variety of active management strategies. Many of these money managers are smaller, boutique firms that might never gain investor visibility if not for being included in HWM’s flagship AdvisorLink® Program.

For the original version on PRWeb visit:


Saturday, May 31st, 2014 EN No Comments

One Angry Mom and No Scholarships

Many parents, who are blessed with smart children, assume that the nation’s top universities are going to be equally impressed with their teenagers. And, most importantly, they assume that these institutions will be showering their children with merit scholarships.

I recently received the following email from an irate mother, who is a physician, as is her husband. The note generated 76 comments on my blog,

Here is a condensed version:

My daughter is a National Merit Finalist and president scholar nominee. She earned a 35 (out of a possible 36) on her ACT and a 2370 (out of a possible 2400) on her SAT. She is a straight “”A student with multiple Advanced Placement classes all with the highest scores of 5. She played soccer and piano. She is an artistic and academic genius with outstanding essays and teacher/counselor recommendations.

My daughter got accepted to every school to which she applied: University of Chicago, Duke, Washington University in St. Louis…to name a few.

Here’s the drum roll…No scholarship money anywhere! The schools expect us to cover 100% of the cost. My husband and I saved $168,000 for college. We were told to cover the remaining amount from our own retirement accounts!

Merit alone is not rewarded in this country. Smart financial planning and saving is penalized. She would have gone free anywhere if her parents had been dumb sloths.

What is hardest to swallow as her mother is that my taxes pay for less hardworking kids with far less merit to go to these schools for free. And these very kids love to brag about their “scholarships.”

The reaction to this mom was clearly divided. Some identified with her and felt the system should reward bright students regardless of their income. Other parents were appalled, including one mother who said, “This childish tantrum, frankly, makes me feel a little ill.”

What many families don’t understand is this: If money is an issue, teenagers have to be strategic when applying to schools. And that means knowing what kind of colleges and universities would be more inclined to give a teenager money.

The physicians’ daughter struck out because she applied to schools that are a magnet for other equally accomplished rich teenagers. There are about two dozen schools in this country that don’t award any merit scholarships to rich students. These schools include all the Ivy League members, as well as institutions like Amherst College, Massachusetts Institute of Technology, California Institute of Technology, Georgetown, Pomona, Stanford and Vassar.

These elite schools, which are all located on the coasts, don’t have to dispense merit scholarships because their brand names attract full-pay applicants who won’t be deterred by a $250,000 price tag. While rich students who get into these schools will pay full-price, these institutions represent winning an education lottery for students who need financial aid. These school typically meet 100 percent of their students’ demonstrated financial need.

Other schools high up in the rankings dispense a limited number of merit scholarships that are often quite small. At Johns Hopkins and Boston College, for instance, just 1 percent of the freshmen class received merit scholarships. Duke recently gave merit scholarships to 60 students out of a freshman class of 1,730. University of Chicago and Washington University are more typical of merit scholarships for schools with high ranks. Their average merit scholarships are in the $10,000 range and are given to 15 percent and 14 percent of their student bodies, respectively.

A friend of mine, whose child also is a National Merit Finalist, had a different experience when her child applied to schools during the latest admission season. Her son cast a wider net. He applied to schools that don’t enjoy instant cache. The family focused on schools that simply have to compete harder at attracting the most brilliant students and, frankly, most schools fall into that category. Her son applied to lesser-known liberal arts colleges featured in Colleges That Change Lives. Her son will be heading to one of those schools—Denison University—in the fall after receiving a scholarship worth $176,000.

I heard about another wealthy boy from San Diego recently whose list of acceptances this spring included Harvard and St. Olaf College in Minnesota. He received nothing from Harvard, but more than $160,000 from St. Olaf.

The vast majority of schools in this country will give bright students merit aid. But to get the best offers, you have to look beyond the elite institutions.


Thursday, May 29th, 2014 EN No Comments

Wealth Management News – May 29

Fri May 30, 2014 1:54am IST


Thursday, May 29th, 2014 EN No Comments

MOVES-Citigroup, HSBC Global Asset Management, Alvarez & Marsal

(Adds Citigroup)

May 29 (Reuters) – The following financial services industry
appointments were announced on Thursday. To inform us of other
job changes, email to


The financial firm said it has named Richard Banziger as
head of Citi Commercial Bank in the United States. A 30-year
veteran of Citi’s institutional clients group, Banziger will
lead the bank’s expanding middle-market banking business across
the country. He replaces Will Howle, who was named head of
Citi’s U.S. retail bank in April.


The company hired a female partner from KPMG to head its
audit operations as part of its drive to increase the number of
senior female executives at the state-backed group. Mary Hall
will be the second-most senior woman at the banking group when
she takes up the role of group audit director in September, a
spokeswoman for Lloyds said.

LLoyds Bank Commercial Banking appointed David Bee as
managing director and head of FX Sales Wealth Solutions, based
in London. Bee will take up the position in August.


The asset management division of HSBC Holdings Plc
said Pedro Bastos would succeed Joanna Munro to become chief
executive officer, Hong Kong, and regional head of Asia Pacific.
Currently chief executive of HSBC Global Asset Management Brazil
and regional head of Latin America, Bastos will relocate to Hong
Kong to take up the new role.


The UK-based professional services firm appointed Kleon
Phili as a managing director to launch its European valuation
services practice, based in London. Prior to joining AM, Phili
served as executive vice president, global segment leader of
financial advisory and executive committee member at Duff
Phelps, a valuation and corporate advisory firm.


The investment manager appointed Mark Guirey as director of
UK institutional business development, based in London. Most
recently, Guirey was at BlackRock Inc, where he spent 13
years, latterly as a sales director within the UK institutional


The investment consulting company appointed Amaya Assan as a
senior investment research analyst, where she will focus on
European, Asian, Emerging Markets and Japanese equity funds.
Before joining Square Mile, Assan served as a senior investment
research analyst for Morningstar OBSR, helping lead the firm’s
coverage of long-only equity funds in the European, global
emerging-markets, Asian and Japanese sectors.


The unit of investment management firm Invesco Ltd
said Andrew Hall was promoted to fund manager on the Invesco
Perpetual Global Opportunities Fund. Hall, who joined Invesco
Perpetual in May last year, will co-manage the fund with Stephen
Anness from May 30.

(Compiled by Natalie Grover and Shailaja Sharma in Bangalore)


Thursday, May 29th, 2014 EN No Comments

Evensky And Former Pupil Merge Firms

Financial planning pioneer Harold Evensky has merged firms with one owned by a former pupil, creating a South Florida wealth management firm with $1.9 billion under management.

The union of Foldes Financial Management of Miami and Evensky Katz Wealth Management of Coral Gables, Fla., comes 18 years after founder Steven Foldes struck out on his own after being mentored by Evensky.

“I left with $25 million to $30 million in assets under management and I’m returning with $600 million,” said Foldes, who has grown to become an influential voice in the planning community in his own right. “Harold should be proud of what he has created.”

The merger was completed 1 a.m. Tuesday, about a year and a half after the two parties started discussing the idea, according to those involved in the deal.

The merged firm goes by the name EK-FFM and will be housed entirely in Evensky’s office in Coral Gables, according to Mark Hurley, who acted as one of the architects of the deal as CEO of Fiduciary Network LLC, a shareholder in Evensky Katz.

With combined assets under management of more than $1.9 million, the two firms have created the largest the largest independent, fee-only financial advisory firm in South Florida, Hurley said.

Evensky, a nationally prominent advisor who is active in the industry as both a speaker and author, runs the business with his wife, Deena Kaatz.

The new firm has 23 employees and about 10 partners, according to Hurley. There were no layoffs as a result of the move, he added.

“This is a merger where the firms know each other well from day one,” Hurley said. “You couldn’t find something better in terms of having people who need the least amount of adjustment, from the client’s perspective.”

Under the terms of the merger, Evensky is chairman of the firm and Foldes is vice chairman, Hurley said. Evenksy could not be reached for comment.

“Their plan is to build the business,” Hurley said.

The firms serve a similar type of clientele—professionals, business owners, corporate executives and other high-net-worth individuals with a worth of between $1 million and $15 million, according to Foldes.

It’s a client base that has a strong need for retirement planning, which is a strong focus of both firms, he added.

“If you asked what are the areas we focus in on, retirement would be first and foremost,” he said. “The second area would be educational planning–working with clients as it relates to funding kids’ educations.”

Mentor, Pupil Reunite

Foldes described the deal as one of those “full-circle” moments in life, re-uniting him with someone he first met nearly 30 years ago as a 36-year-old from Hazleton, Pa., who had moved to Miami after making a fortune from the sale of his family’s footwear business.

At the time, financial advisors were a rare breed, Foldes notes, and he was just looking for someone he could trust to help him make wise use of the millions he made through the sale of “Jelly” shoe sandals—a hot fashion item in the 1980s.

That’s when he hit upon Evensky, who even back then was carving out a reputation as an advisor who focused on clients’ interests, he said. “He had an immaculate reputation in the community when I checked him out,” Foldes said. “He had all the things you look for in a trusted advisor.”

The two got along so well that Evensky offered Foldes–who was both a trained lawyer and businessman–a job as a CFP-in-training five years later. Foldes accepted the offer and learned the advisory business under Evensky’s tutelage, until he left in 1996 to start his own firm. “I’m an entrepreneur at heart,” he said.

Foldes, who owned 100 percent of the firm before the merger, said the merger grew out of his need to find reliable partners–something essential to give his clients assurance that the operation would continue if Foldes were unable to perform his duties.

That security has been achieved through the merger, he said, along with his desire to keep his staff intact and maintain the firm’s fee-only, fiduciary standards.

“The real issue was, is there an existing infrastructure that can handle the large number of clients we have?” said Foldes, whose firm had about 450 clients before the merger.


Wednesday, May 28th, 2014 EN No Comments

Oil, Oil Everywhere

For the third year in a row, the summer driving season kicked off with national gasoline prices at $3.67 per gallon, according to data from the U.S. Department of Energy. Prices at the pump are below the $3.80 – $4.00 danger zone where they contributed to economic soft spots in 2011 and 2012. But they may head higher with crude oil prices rising over $104 last week — well above the levels seen around Memorial Day weekend during the past couple of years. While the conflict in Ukraine may be fueling some of the price gain, this is nothing new — a year ago the world was focused on the conflict in Egypt, and in 2011, the civil war in Libya was the source of geopolitical risk to oil prices. So why — if the United States is producing more oil and consuming less than it was a decade ago — is the price of oil going up, and what does it mean for investors?

Leaking Oil

The United States is the largest producer of petroleum products in the world, exceeding even Saudi Arabia. Output has been soaring. In fact, U.S. production is up over 50% since 2007. Rising production and relatively flat consumption — the United States uses about 10% less petroleum than in the middle of the last decade — has led to rising inventories. U.S. inventories recently hit the highest level since government records have been kept back to 1920.

But this is not all destined for use in the United States. In fact, crude inventories at the United States’ main oil hub in Cushing, OK have declined sharply — falling by over 50% from a year ago — to levels not seen since 2008. Instead of being routed to other destinations across the country, oil supplies have been diverted through the southern portion of the Keystone XL pipeline from the Midwest to the Gulf Coast refineries for export overseas. The United States has rapidly become the largest exporter of petroleum products in the world (the United States does not export crude oil by law, but instead exports refined petroleum products).

Global Gap

Petroleum prices in the United States are being boosted by the gap between global supply and demand [Figure 1]. Relatively weak supply growth is the result of declines in oil production and exports in countries such as Libya and Iran that can be tied to geopolitical tensions and in others like Venezuela and Mexico stemming from poor reinvestment. At the same time, global demand has been growing as the world economy expands. It is true that developed market countries like the United States are much more energy efficient than they were 30 years ago — the United States uses 45% less energy per dollar of gross domestic product (GDP) than in 1980. However, emerging market countries are less efficient and use more energy per dollar of GDP as the manufacturing portion of their economies grow. For example, Thailand and Vietnam both use about twice as much energy per unit of GDP as they did in 1980. As a result, there has been no change in the ratio of world energy consumption per unit of world GDP for decades, according to data from the U.S. Energy Information Agency. The world demand for energy rises in lock step with global GDP, putting pressure on prices.



Growth in global demand is coming from emerging markets like China and even Saudi Arabia. Saudi Arabia is now among the top-five largest oil consumers in the world as its youthful population grows, leaving less available for export. In fact, in 2014 it is likely that emerging markets may — for the first time — account for more world oil consumption than developed countries [Figure 2]




As energy production continues to increase in the United States, oil supply from Iran and Libya resumes flowing to world markets, consumers react to higher prices, and emerging markets adopt more energy-efficient practices, the gap between demand and supply growth may narrow and ease the pressure on oil and gasoline prices. We will be watching the movements in energy prices carefully to judge their impact on the economy, but at a little over $104 prices may already be near their peak for the year — crude oil peaked at $110 in each of the past two years before dropping back into the $90s.

The primary focus for investors may be on transportation — not what they pay to drive their cars, but the increasing amount of oil being moved around the United States. Three-quarters of U.S. refining capacity is located on or near the coasts. These refineries have traditionally tended to use imported crude oil delivered by tanker because it was cheaper than getting U.S.-sourced crude to their operations over land. But the growing supply and a pipeline capacity shortage have led to more crude oil moving around the United States on trucks, barges, and trains than at any point since the government began keeping records in 1981. In fact, rail shipments of oil have more than tripled since the beginning of 2010 [Figure 3].



Strong demand for transport of U.S.-sourced petroleum combined with tight pipeline capacity may continue to support stocks in the railroad and trucking industries along with the pipeline operators. We continue to favor these industry groups in the industrials and energy sectors as part of a broader theme of improved business spending.



The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance reference is historical and is no guarantee of future results. Past performance is no guarantee of future results.

The economic forecasts set forth in the presentation may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

Stock and mutual fund investing involves risk including loss of principal.

Energy Sector: Companies whose businesses are dominated by either of the following activities: The construction or provision of oil rigs, drilling equipment and other energy-related service and equipment, including seismic data collection. The exploration, production, marketing, refining and/or transportation of oil and gas products, coal and consumable fuels.

Industrials Sector: Companies whose businesses manufacture and distribute capital goods, including aerospace and defense, construction, engineering and building products, electrical equipment and industrial machinery. Provide commercial services and supplies, including printing, employment, environmental and office services. Provide transportation services, including airlines, couriers, marine, road and rail, and transportation infrastructure.This research material has been prepared by LPL Financial. 

This research material has been prepared by LPL Financial. 

To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial is not an affiliate of and makes no representation with respect to such entity.

Not FDIC or NCUA/NCUSIF Insured | No Bank or Credit Union Guarantee | May Lose Value | Not Guaranteed by any Government Agency | Not a Bank/Credit Union Deposit



Jeffrey Kleintop is Chief Market Strategist and Executive Vice President at LPL Financial. In this role, he leads the development and articulation of LPL Financial Research market and investment strategies.



Wednesday, May 28th, 2014 EN No Comments

What Can We Learn From Disruptive Business Models?

One of the co-founders of Sanctuary is fond of recalling a valuable lesson from his days at Stanford Graduate School of Business.

The CEO of every business, he said, has to answer the question, “Do I want to make my solution faster, cheaper or better?”

The catch: It’s really only possible to do two at any one time and be profitable.


They Never Saw It Coming

That’s a particularly relevant insight now because disruptive business models are transforming industry after industry, including the wealth management business.

Disruptive technologies are often good for consumers and upstart firms, but not so good for entrenched companies who frequently fail to recognize the oncoming train.

Thus, as the ground continues to shift, businesses need to ask themselves what they want to be? Faster and Cheaper? Cheaper and Better? Better and Faster?


$25 Billion In Wealth Creation

To answer that question, it’s helpful to look at disruptive business models in the transportation, restaurant and hospitality industries.

In the past 10 years, upstart companies have re-defined those industries and collectively created more than $25 billion in wealth – most of it right here in the Bay Area.

In the transportation business, Zipcar and Uber have remade the industry in just four years.

Zipcar will rent you a vehicle for $8 to $10 an hour. Uber bypasses the monopolistic cab companies and brings you a lift (or is that Lyft?) right from a tap of your smartphone. Both were “faster” and “cheaper.”

Cab companies and rental car agencies first responded by thumping their chest and saying neither would ever work. 

Bad strategy.

Uber is now in 70 cities in 36 countries since it launched in San Francisco in 2009. It has an estimated market cap of $10 billion.

Zipcar, founded in Cambridge, Mass. in 1999, was purchased by Avis for $500 million in cash last year. It now has more than 800,000 members and operates in the U.S., Canada, U.K., Spain and Austria.


Who Needs The Ritz?

Airbnb has succeeded by providing lodging “cheaper” and “faster” than their old-school competitors.

At Airbnb, you can find a perfectly comfortable room rented out by an owner. Anyone can get into the hospitality business by simply offering their room through Airbnb. It’s such a simple idea, and it’s taken off around the world.

Founded in 2008 in San Francisco (are you noticing a trend?), Airbnb today offers rooms in 34,000 cities in 192 countries. It has an estimated market cap of $10 billion. That’s more than its brick-and-mortar competitors, Wyndham Worldwide, with a market value is $9 billion, or Hyatt, whose market value is $8.8 billion.

The established hotel chains are so unnerved by Airbnb’s success that they have launched a legal counterattack in numerous cities, arguing that Airbnb must pay hotel tax. 


And You Are?

OpenTable and Yelp upended the restaurant business to every foodie’s delight.  They’re classic examples of “cheaper” and “better.”

Both facilitate reservations and offer restaurant reviews. They eliminated the aggravation of calling around for a table and provide valuable intel to avoid a less-than-stellar dining experience.

By offering reviews, they also changed the balance of power between diner and purveyor. There’s nothing like the threat of a bad review to improve your fettuccini and your service.

Yelp, launched in 2004, went public in 2012 and has a market cap is $3.8 billion. OpenTable, launched in 1998, went public in 2009 and has a market cap of $1.3 billion. Both were founded in San Francisco.

What’s astonishing is the speed of these disruptive technologies. In roughly 10 years, these five companies have created more than $25 billion in value.


Are You Ready?

The wealth management business may be next. The online “robo” advisor is another disruptive technology. It hasn’t reached critical mass yet, but it may not be far off.

So what should advisors do?

First, don’t make the mistake of ignoring the oncoming train, like the other industries did. Wealthfront’s home page screams that it has $800 million in assets, and its CEO recently announced a single-stock diversification service to Twitter employees. The firm signed up $200 million in assets.

Wealthfront was founded in 2007 in Palo Alto, just a 45-minute drive from San Francisco.

Second, wealth advisors need to deliver what clients want. That requires a segmentation strategy to provide the solution demanded by each specific audience. It’s important to figure out whether your emphasis is on Baby Boomers, GenXers or Millennials.


“Better” Is Best

For wealth advisors, “better” and “faster” are clearly the way to stand apart from the robo advisors  – at least for Baby Boomer clients.

To own “better,” independent advisors need to provide exceptionally smart service. That can’t be replicated by a computer.

Wealth management has always been a relationship business that turns on interpersonal relations, as much as skill and access to ideas. If you can’t deliver better service than a computer, you’re in trouble.

In terms of “faster,” advisors need to deliver answers faster and provide instant access to information. Consolidated performance reporting firms and a user-friendly website make that possible today.

“Cheaper” should be left to the robo advisor. You won’t be able to compete on price and run a profitable business.


A Different Strategy for Each Market

Or maybe not.

You may want to adopt a different strategy for Millennials and GenXers, who prefer a lower-cost, less personal approach. “Cheaper” may be a winning strategy for this audience. But it will be difficult to be “better.”

Roughly speaking, there is a generational divide across all of these industries, including wealth management. Baby Boomers with more money and less time prefer full-service. Tech-savvy Millennials and GenXers like the DIY approach because it is typically less expensive.


The Bottom Line

One lesson is clear: Flexibility is essential when disruptive technology arrives.

So there is a holy grail for advisors, and it’s this: innovation. Wealth management firms need to reinvent themselves as disruptive business models knock on their door. They need to decide which two of the three they’re going to be.

There will always be a market for people who would prefer to stay at The Four Seasons rather than an Airbnb room in the same neighborhood. The question is how many.




Wednesday, May 28th, 2014 EN No Comments

Deutsche Asset & Wealth Management ponder UCITS version of recently …

Lord, Abbett Co LLC (“Lord Abbett”), an independent investment management firm, this week announced that it had launched Passport Portfolios to provide non-US institutions and non-US resident investors with access to select Lord Abbett fixed income investment strategies through a suite of UCITS funds.

The strategies available include:

  • Lord Abbett Short Duration Income Fund
  • Lord Abbett High Yield Fund and
  • Lord Abbett Strategic Income Fund.

The portfolios are listed on the Irish Stock Exchange. Arbour Partners has been appointed to support distribution of the Passport Portfolios in Europe. Founded in 1929, Lord Abbett is now increasing its footprint as a global investment manager, building on its strong product competencies. The firm has approximately USD139bn in AuM with USD92bn in fixed income strategies.
Key details of the funds include:
·         Lord Abbett Short Duration Income Fund: Designed to focus on sectors that have demonstrated superior return profiles historically, such as investment grade and high yield short duration mortgage, corporate, government and asset backed securities. The fund seeks to provide higher yield than a traditional short duration strategy, but with lower duration than a traditional core bond strategy. It utilizes a strategic yield-based portfolio design and diversification to reduce volatility. The fund is managed by the same investment team, and with the same investment process, as the US-registered Lord Abbett Short Duration Income Fund.
·         Lord Abbett Strategic Income Fund: Focused primarily on Baa-rated corporate bonds, the fund looks to identify corporate bond investment opportunities across multiple sectors and uses a diversified blend in the portfolio construction to enhance return and reduce volatility.
·         Lord Abbett High Yield Fund: Designed to emphasize asset-rich companies with strong management teams, while seeking investment opportunities across the credit spectrum and applying rigorous risk management.
“The launch of these products presents an opportunity for a wide range of investors outside the US, especially in Europe and the Middle East, to access US fixed income markets at a time when we are seeing attractive income opportunities there,” commented Stephen Hillebrecht, Fixed Income Product Strategist at Lord Abbett. “We continue to see demand for yield-based strategies that also limit interest rate exposure, and we feel that our investment-led, investor-focused approach will be well-received. The U.S. corporate and asset-backed fixed income market remains one of the deepest, broadest and most liquid fixed income securities markets in the world and continues to provide income-producing opportunities.”  
Investment management group Altana Wealth has announced that it has launched a UCITS version of its absolute return Altana Corporate Bonds Fund, following institutional demand and strong performance; it has generated a gross return of 13.34 per cent since inception in 2013. 
The UCITS fund launched with EUR15mn. Altana is offering both income and accumulation share classes for both retail, with a 1.25 per cent management fee and institutional, with a 0.75 per cent management fee. The fund has UK reporting status and offers an additional RDR-compliant ‘clean’ share class for UK investors.
Portfolio manager Stevan Bajic will manage the fund, whose aim is to generate positive returns in all market phases by investing in a globally diversified corporate bond portfolio with regular income from short-dated and quality household-name corporate bonds. 
The fund sources attractive bond investment opportunities globally in both primary and secondary markets by first analysing the credit quality of corporates with strong defendable business structures and then modeling the reward for potential changes. Through April 2014 the fund has returned +3.84 per cent after returning +9.5 per cent last year.
Bajic was quoted as saying: “Credit investors are facing many challenges in the current environment of stretched valuations; where to source decent returns while being fairly compensated for the risks, how to avoid the liquidity trap and how to deal with the end of QE and the threat of rising interest rates? With a diverse approach being wary of the potential risks as well as being patient to exploit bouts of weaknesses investors can still achieve above average returns.”
Lee Robinson, founder and CIO of Altana Wealth added: “Stevan’s outstanding performance and innovative approach to portfolio construction has already solicited high interest from a number of European institutional investors, wealth managers and family offices looking for a UCITS version of this fund.”
Deutsche Asset Wealth Management is planning to develop a UCITS version of its recently launched DWS Strategic Equity Long/Short Fund reported Citywire Global this week.  
A DWS spokesperson told Citywire Global: “As a leader in liquid alternatives, the business is working on similar initiatives for the Ucits market in Europe.”
The DWS Strategic Equity Long/Short Fund is a mutual fund which seeks to provide long-term capital appreciation by employing a multi-manager investment approach. At the time of launching Jerry Miller, head of DeAWM in the Americas said: “Alternative mutual funds are a critical part of our overall Americas strategy and we are committed to growing this platform.”
“DWS Strategic Equity Long/Short Fund is a great example of DeAWM’s competencies coming together in a product that will allow investors to diversify their equity exposures and capitalise on market opportunities,” added Bernard Abdo, head of DeAWM’s Alternative Fund Solutions (AFS) group in the Americas. “It combines our research and risk management capabilities with the expertise of some of the leading long/short equity managers into a single mutual fund, which seeks attractive, risk-adjusted returns over the long term.”

Finally, the Luxembourg Fund Labelling Agency (LuxFLAG) has launched the LuxFLAG ESG Label. The label, available to both UCITS and AIFMD-compliant funds, will be granted to investment funds that meet specific criteria related to environment, social and governance objectives.  
Three asset management companies have already committed to apply for the new ESG Label: OFI Asset Management, Nordea and Sparinvest.
“Over the past ten years, the responsible investment sector has grown at a rate that has outstripped growth in most other investment strategies. The LuxFLAG ESG Label is a new tool in the broad range of initiatives that encourage fund stakeholders to act responsibly and aim for the achievement of a better and sustainable future. We in Luxembourg strongly support this goal,” said Pierre Gramegna, Minister of Finance of the Grand Duchy of Luxembourg.

Thomas Seale, chairman of LuxFLAG said that the new LuxFLAG label was appropriate for investment funds “which truly incorporate disciplined ESG criteria in their investment process”. He added: “It will help these funds differentiate themselves from other offerings in the market place and it will help investors make informed decisions through the enhanced transparency and visibility the label provides,” says. “As there is no existing product based label covering ESG, the new ESG Label by Luxflag fills a gap in the European investment fund market.”


Monday, May 26th, 2014 EN No Comments