Archive for July, 2014

Johnson Financial names chief investment officer

“Wealth Management is a growing and strategically important business line for Johnson Bank,” said Thomas Bolger, president and chief executive officer of Johnson Financial Group. “We have recognized that the size of our wealth business and the investment needs of our client base necessitates we have a strong investment leader.”

“Kevin is a great fit to take our Wealth business to the next level,” said Daniel Kaminski, executive vice president of wealth at the firm. “He has been an architect behind multiple pension plans and served as a leader in investment strategy for 20 years.”

In the newly created position, Tan will oversee the bank’s investment process and will report to Kaminski. Formerly a senior vice president with The Northern Trust Company, Tan has more than 26 years of financial service experience. Tan has been responsible for investment strategy for assets ranging up to in excess of $1 billion, including recommending and implementing strategic and tactical asset allocation, evaluating and selecting investment managers.


Wednesday, July 30th, 2014 EN No Comments

Labuan IBFC offers Islamic wealth management

KUALA LUMPUR: Labuan International Business and Financial Centre Inc Sdn Bhd (Labuan IBFC) has introduced its new product, Islamic wealth management, to meet the demand by Muslim and non-Muslim businessmen seeking Islamic way of managing their wealth.

Its chief executive officer, Saiful Bahari Baharom, said Muslim investors had started to shift from the conventional to syariah-compliant wealth management as the latter offered both the physical and spiritual aspects.

“This has somehow create an awareness among the foreign investors to do so as they are convinced with the Islamic version to secure their properties,” he told Bernama in an interview recently.

Saiful said there had been attempts by foreign institutions to set up Islamic wealth management. However, they did not do well.

“But since the last five to eight years ago, the number of syariah-compliant assets has grown as well as the investment products and therefore having a unit to manage these assets the Islamic way is crucial,” he said.

He said the Malaysian agency has also being approached by lawyers seeking advice on how they (the lawyers) could service their clients.

The syariah-compliant Islamic wealth management derives from the fundamental concept of wealth but it extends to the structures of Islamic financial products, portfolio management, asset allocation and overall financial planning.

Finance Deputy Minister, Datuk Ahmad Maslan, was reported as saying that with Malaysia being the first to introduce this new product under the Islamic financial system, hoped to also be the champion as it did for the sukuk market.

“Malaysia has been recognised as a global in Islamic finance by being the world’s third largest market for syariah assets – Islamic banking products and services, sukuk and takaful, so let’s hope that we can also champion Islamic wealth management,” he said.

Ahmad said to further Malaysia’s aspiration of becoming a centre of intellectual excellence in Islamic finance, the government was stepping up measures to that end.

“Several human capital development institutions, including the International Shariah Research Academy for Islamic Finance, International Centre for Education in Islamic Finance, Islamic Banking and Finance Institute of Malaysia and the Asian Institute of Finance have been established to crystallise the aspiration.

“I foresee Islamic wealth management as a natural next-stage development of the local Islamic finance industry with the availability of our infrastructure, in respect of the human capital development to the Islamic financial institutions and expertise we have before us today,” he said. — Bernama

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Wednesday, July 30th, 2014 EN No Comments

The “Alternatives Issue,” Now Out from Investments & Wealth Monitor

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Investments Wealth Monitor

‘What was once nontraditional is now mainstream,’ says Editorial Board Chair David Koulish, CPWA. ‘Our authors attempt to answer many common questions about alts, including definitions, risk and return tradeoffs, liquidity, and portfolio implementation.’

Denver, CO (PRWEB) July 30, 2014

Investment Management Consultants Association® (IMCA®) dedicates the July/August edition of Investments Wealth Monitor to the hot topic of alternative investments, with deep dives into the latest trends from scholars and practitioners.

Articles in the issue, released this week, examine topics including master limited partnerships, global infrastructure funds, managed futures, and diversification in the post bond-boom market. The entire issue is available online, free at

Author Verne Sedlacek, president and chief executive officer of Commonfund, explores the issue of alternatives in his article “Alternative Investments: Past, Present, and Future.”

“Alternatives have become the traditional. They were truly alternative in decades past but have now entered the mainstream,” he writes. “Alternative investment strategies are included in a portfolio to enhance returns, reduce risk, or both.”

And alternatives are flexing some muscle, writes Christopher Maxey, a portfolio manager of alternative investments at Fortigent LLC, in his piece “Alternative Strategy Mutual Funds: Opportunity or Mirage?”

“Alternative offerings are one of the few growth engines in the mutual fund universe,” he writes. “By some estimates, alternative mutual funds will grow to represent 13 percent of mutual fund assets by 2015, up from 6 percent at the end of 2010.”

Even the once-rare master limited partnership (MLP) investment is becoming mainstream and an important component of a diversified portfolio, writes Capital Innovations LLC founder and Chief Investment Officer Michael Underhill in his article “Master Limited Partnership Investing: A Case for MLPs as a Core Allocation in Your Portfolio.”

“Master limited partnership investing once was considered to be in the alternative investing realm, but it’s become mainstream because of increasing demand for assets offering stable income and growth potential,” Underhill writes. “MLPs are the exchange-traded securities of real businesses, with real assets, that generate real cash flow.”

Other articles in the July/August edition of Investments Wealth Monitor include “Rethinking Diversification in a Post Bond-Boom Market,” “Smart Beta: The Second Generation of Index Investing,” “Alternatives … Compared to What?” “Managed Futures: Cyclical Trough or Structural Impairment? Analysis and Proposed Solutions,” “The Brave, New World of Operational Due Diligence: Responding to a Regulated and Institutional Alternative Asset Industry,” “Thoughts on Endowment Investing in the 21st Century,” and “Global Infrastructure Funds.”

David Koulish, CPWA®, chairs the Investments Wealth Monitor editorial advisory board and notes the issue taps into a growing need to study investments that go beyond long-only equity, fixed income, and cash management to include hedge funds, private equity, real assets, commodities, and structured products.

“Many in the industry would argue … that what was once nontraditional is now mainstream,” he writes in his editor’s note. “Our authors attempt to answer many common questions about alts, including definitions, risk and return tradeoffs, liquidity, and portfolio implementation … Not bad for a beach read.”

Investments Wealth Monitor is published six times a year and reaches some 9,400 IMCA members. The most current issue is always available for free on the website.


Established in 1985, IMCA is a nonprofit professional association and credentialing organization with more than 9,400 individual members. IMCA members collectively manage more than $1.9 trillion, providing investment consulting and wealth management services to individual and institutional clients. Since 1988, IMCA has offered the Certified Investment Management Analyst® (CIMA®) certification, which earned accreditation by the American National Standards Institute (ANSI) in April 2011, making it the first financial services credential in the United States to meet international standards (ISO 17024) for personnel certification. IMCA’s Certified Private Wealth Advisor® (CPWA®) certification is suited for wealth management professionals working with high-net-worth clients. In 2013, IMCA conferences and workshops hosted more than 4,000 attendees.

IMCA® and Investment Management Consultants Association® are registered trademarks of Investment Management Consultants Association Inc. CIMA®, Certified Investment Management Analyst®, CIMC®, CPWA®, and Certified Private Wealth Advisor® are registered certification marks of Investment Management Consultants Association Inc. Investment Management Consultants Association Inc. does not discriminate in educational opportunities or practices on the basis of race, color, religion, gender, national origin, age, disability, or any other characteristic protected by law.

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Wednesday, July 30th, 2014 EN No Comments

High Net Worth Wealth Management–What Wealthy Investors Expect

Numerous financial firms provide “wealth management” services, but what does that term mean and what services do wealthy investors think should be included in a high net worth wealth management program?

According to the financial literacy website Investopedia, wealth management” is “a professional service which is the combination of financial/investment advice, accounting/tax services and legal/estate planning for one fee…It can encompass all parts of a person’s financial life.”

In considering the facets of their financial life, the highest percentage of wealthy investors (87 percent) believe that investment planning is the most important component of high net worth wealth management, according to a recent study conducted by Spectrem’s Millionaire Corner. This was followed by comprehensive financial planning (85 percent), tax information and advice (84 percent) and investment management (82 percent).

For more than three-fourths (77 percent) of wealthy investors, access to a wealth manager to assist with administrative tasks regarding their investments should also be included in high net worth wealth management.

More than six-in-ten believe it should include access to unique investment products (66 percent) and trustee information and advice (61 percent). Less than half of wealthy investors believe these services should include a checking of accounts (41 percent) and access to credit (38 percent).

Expectations for high net worth wealth management services do not vary significantly by gender, but nearly across the board, wealthy women investors are more adamant than men that these services should be included. For example, 90 percent of women surveyed said that investment planning should be offered in a high net worth wealth management program compared with 84 percent of men.

Tax planning and consultation has taken on increased importance to wealthy investors. Six years ago, in a previous Millionaire Corner study, 64 percent said this should be included in high net worth wealth management, compared with 84 percent in 2014.

One of the benefits of a high net worth wealth management program is that it makes wealthy investors feel financially confident. More than half of the wealthiest investors surveyed either “strongly agree” or “agree” that such a program increases their financial confidence.


Tuesday, July 29th, 2014 EN No Comments

Puerto Rico debt depresses UBS Wealth earnings

Despite record revenue at UBS Wealth Management Americas, profits fell as the firm reported that it had to set aside $44 million for litigation expenses last quarter.

The charge was mostly related to a rash of investor complaints stemming from the firm’s investments in Puerto Rico, according to Sergio Ermotti, the chief executive of the parent company, Zurich-based UBS AG. The U.S. wealth management group reported a second-quarter profit of $238 million, down from $245 million—or 3%—from a year ago.

Hundreds of arbitration cases and several class action claims have been filed on behalf of UBS clients who claim they were placed in unsuitable and highly leveraged municipal bond funds that plummeted in value last fall. UBS had said that it sold more than $10 billion of the closed-end funds by the end of 2012.

Other firms, including Bank of America Merrill Lynch, are also facing litigation from Puerto Rico.

The firm also posted a decline in net new assets as investors yanked $2.5 billion more than they deposited at the firm during the quarter. The firm chalked the net asset outflow to clients pulling money out to pay taxes.

But the firm’s wirehouse rivals did not experience the same sharp decline in net new money.

UBS brought in $2.8 billion in net new money during the same quarter last year.

The firm has a stated goal of bringing in $2 billion to $4 billion each quarter, but Mr. Ermotti said that it was a minor blip compared to overall performance.

Despite that decline in new money, overall assets under management at the firm rose 14% from a year ago to $1.017 trillion, and average invested assets per financial adviser hit a record $143 million, reflecting strong market performance.

“The quarter’s results need to be put in the context of Wealth Management Americas’ very strong net new money track record with nearly $60 billion in net inflows over the last 16 quarters,” Mr. Ermotti said.

That dampened results on what was otherwise a strong quarter for the firm’s roughly 7,100 advisers, who brought in record revenue of nearly $1.9 billion, or approximately $1.068 million of annual revenue per adviser.

By that mark, UBS advisers were the most productive of the four wirehouse firms by a slight margin. Merrill Lynch, which previously held the No. 1 spot, reported earlier this month that its roughly 13,800 advisers brought in approximately $1.058 million on average in the second quarter.

UBS said its advisers are benefitting from growth in recurring fee income, which rose 13% from last year to $1.16 billion. Tom Naratil, chief financial officer at UBS AG, said focusing on ultra-wealthy clients, who have higher margins and greater propensity for wealth creation, is paying off.

“We’ve just been exceptionally successful in the [ultrahigh net worth] segment,” Mr. Naratil said. “That’s a segment that has a better profit margin than the high net worth segment.”

Still, Mr. Naratil said the firm remains focused on cutting costs. The firm’s Americas’ unit trended away from its stated goal of hitting a cost-to-income ratio of 75% to 85% by 2015. The firm’s ratio rose to 87.4% from 86.2% in the second quarter last year.

“While we’re focused on reducing costs, we continue to invest in key strategic areas of our business such as lending, technology, infrastructure and financial planning,” he said.

Total operating expenses of $1.66 billion were up 8%, as financial adviser compensation rose 5% from the second quarter last year to $742 million. Loans and commitments related to recruiting rose 8% in the quarter to $184 million from $171 million a year ago.

The firm reported total outstanding recruitment loans to financial advisers of $2.985 billion, a number that declined 2% from last year as older deals were forgiven.

Overall, the firm’s headcount remained relatively steady at 7,119, a net gain of six advisers over the quarter.

“Our focus on [financial adviser] retention remains relentless and financial adviser recruiting will continue to be highly selective,” Mr. Ermotti said.


Tuesday, July 29th, 2014 EN No Comments

UBS Wealth Americas 2nd-quarter net falls despite record revenue

NEW YORK, July 29 (Reuters) – UBS Wealth Management
Americas, the smallest of the four biggest U.S. brokerage firms,
said on Tuesday its second-quarter pretax operating profit fell
3 percent as clients withdrew money and expenses jumped.

Operating expenses at the New York-based unit of Swiss
banking giant UBS AG were up 8 percent to $1.7
billion on higher legal, compensation and recruiting costs and
shared service costs with its parent.

Revenue climbed 7 percent to a record $1.9 billion as the
firm’s 7,119 brokers collected more managed account fees and
arranged more loans that generated higher net interest income.

UBS Wealth Americas said its cost-income ratio, a measure of
expenses as a percent of revenue, was “within target range” at
87.4 percent, though it was up from 86.2 percent a year earlier.
The business was plagued by high expenses that totaled more than
90 percent of revenue when Chief Executive Officer Robert McCann
joined from Merrill Lynch in 2009.

Pretax operating profit, which contributed 17 percent to the
parent company’s total operating profit, declined to $238
million from $245 million a year ago. Broker compensation and
recruiting commitments each rose 8 percent to a total of $926
million. UBS Wealth had $2.99 billion of recruitment loans to
brokers on its books as of June 30.

Like Morgan Stanley, Merrill Lynch and Wells
Fargo Advisors, UBS’ larger U.S. competitors, the firm
has been harvesting income by encouraging clients to use
fee-based accounts tied to assets kept at the firms rather than
charging them trading commissions.

Recurring income, comprised mostly of managed account fees,
jumped 13 percent to $1.42 billion, or 74.9 percent of total
revenue, while commissions fell 2 percent to $464 million on
lower municipal securities trading. UBS said the big fee jump
reflected charges to clients based on higher assets in their
accounts at the end of the first quarter.

Managed account assets soared by $16 billion to $33 billion,
or one-third of total invested assets, at June 30. The jump
reflected market gains rather than new assets, since UBS said
clients withdrew a net $2.5 billion from their accounts during
the quarter to cover “seasonal” tax payments. In the
year-earlier quarter clients added more than $2 billion of net
new money.

Clients’ total invested assets still rose to a record $1.02
trillion from $892 billion a year ago, reflecting strong market
performance. The profit margin on the assets of 0.76 percent,
however, was at the lower end of UBS AG’s target range.

UBS brokers ended the quarter on track to each produce an
average of $1.07 million in revenue this year, which would be a
record, and were heeding the bank’s directive to sell loans.
Average mortgage balances grew 5 percent during the quarter and
securities-based loan balances rose 4 percent.

Credit loss expenses for bad loans rose to $2 million from
zero a year earlier, and the firm reserved $44 million for
undisclosed litigation and regulatory matters. On Tuesday, its
parent company said it took a $281 million charge for a tax

UBS Wealth Americas added a net six advisers during the
quarter. CEO McCann has said he is satisfied with a sales force
of about 7,000, about half the size of Morgan Stanley, Wells
Fargo and Merrill Lynch.

(Editing by Jeffrey Benkoe)


Tuesday, July 29th, 2014 EN No Comments

Forecast: Clear Sailing For Stocks?

You can’t help but be bullish on stocks now. I mean, really. That’s the simple message being told by the ETF market. Well, two ETFs to be sure.

Take a look at the price spread between the SPDR SP 500 ETF (SPY) and the iShares SP 100 ETF (OEF). It’s widening. Nothing new in that: the SPY portfolio’s been gaining on OEF since early 2009. From the looks of it, though, there seems a lot more widening yet to come.



“So what?” I hear you say.

Consider this: the SP 100, a subset of the SP 500, is made up of the bluest of the blue chips. This traces back to the benchmark’s birth as the CBOE 100. In 1983, the Chicago Board Options Exchange fashioned the index from the stocks underlying its most actively traded contracts. Given the listing requirements then in effect, the stocks in the SP 100 tended to be largest issues in its parent index.

The SP 100’s median market capitalization is four times higher than that of the SP 500. The narrow index, too, has a lower price-to-earnings ratio, a higher dividend yield and lower volatility. Still, the correlation between the two metrics is very high.

All this says the SP 100 is a more defensive play on U.S. equity than the SP 500. Put another way, if you’re an aggressive bull, you’re more likely to pick the broad market as your playground rather than its more staid subset. Likewise, when your risk appetite diminishes, you’ll tend to eschew all but the biggest stocks.

The four-year congestion area anchored by the Great Recession’s 2009 bottom at $33  set up a run to the $105 level. Between March and May this year, the $105 level was tested three times before a breakout to the upside. Now SPY’s premium is $110 and, if the bulls continue their hold on the market, a $138 premium is in the cards.

The SPY/OEF spread’s a risk barometer and it’s saying there’s still some clear sailing ahead. Keep a weather eye peeled, though, for any gathering gloom on the horizon.


Monday, July 28th, 2014 EN No Comments

Labor Market Could Continue to Stanch Inflation

While recent inflation numbers have sparked debate about U.S. central bank policy, it’s important to put these numbers in perspective. We think it’s reasonable to ask: Are the recent upticks signs of sustained inflation to come? Are traditional drivers of inflation firmly in place?

We believe the likely answer is no, and we further believe the U.S. economy is not ready to generate the type of growth that could support a steady rate of troublesome inflation (certainly not anything that floats above 2% for an extended period).

One of the biggest reasons behind our doubts lies in the labor markets. Since 2008, millions of working-age Americans have retreated to the margins of the workforce. Of those who became long-term unemployed after the recession, only one-fifth has resumed full-time work. (Data: Dow Jones.)


Inflation as a Keystone

Why are we writing about inflation? Because the trajectory of inflation is among the bigger questions that economists are waiting on as they assess the future of the U.S. economy. So far, what they do know is that the U.S. Federal Reserve’s preferred inflation gauge — the personal consumption expenditures index, or PCE — has run below target for two years (see chart at bottom). It has picked up recently, sparking a barrage of headlines, but it is still well within reasonable, noninflationary territory. The downward tug of labor markets has been a big reason.

In large part, the labor market’s problems are structural in nature. In other words, the job market has changed so much since the recession that there is now a mismatch between what employers need and what job seekers can offer. Technological advances, consolidation of redundancies within industries, and even a repressed housing market could potentially keep this imbalance going well into the future.


A Nod to Some Positive Data

The insecure state of the employment picture does not preclude some positive developments. Indeed, there is a higher degree of labor tightness in certain occupations (oil-field jobs in the Midwest are notable examples, along with construction jobs in very specific areas of the country).

Moreover, the Bureau of Labor Statistics has reported a decrease in the number of job seekers per job opening, and in what might be considered one of the lesser-followed metrics, the so-called quit rate is up (meaning that more people are leaving ho-hum jobs in order to accept positions that are more suitable to their backgrounds and skills).


…And a Reminder to Keep a Moderate View

In spite of the trickling of positive news, so far, the upticks have been very modest; current conditions suggest that a sudden upward spiral in prices is not imminent, and inflation readings could very likely remain moderate for some time. Absent a dramatic recovery, soft labor markets should continue to be a major factor.





The views expressed represent the Manager’s assessment of the market environment as of June 2014, and should not be considered a recommendation to buy, hold, or sell any security, and should not be relied on as research or investment advice. Views are subject to change without notice and may not reflect the Manager’s views.

Carefully consider the Funds’ investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Funds’ prospectuses and summary prospectuses, which may be obtained by visiting our fund literature page or calling 877 693-3546. Investors should read the prospectus and the summary prospectus carefully before investing.



Investing involves risk, including the possible loss of principal.

Past performance does not guarantee future results.



Paul Matlack is a Senior Portfolio Manager and Fixed Income Strategist at Delaware Investments


Monday, July 28th, 2014 EN No Comments

DeAWM names head of active asset management

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Monday, July 28th, 2014 EN No Comments

Margie Shard earns Five-Star Wealth Manager Award

Posted: Friday, July 25, 2014 8:50 pm

Updated: 8:52 pm, Fri Jul 25, 2014.

Margie Shard earns Five-Star Wealth Manager Award


Margie Shard, CFP from Shard Financial Services Inc. has been given the Five-Star Wealth Manager Award from FIVE STAR Programs, the largest national research and rating agency for wealth managers. After the selection process, Shard was named in the top 7 percent of wealth managers in the Detroit area. Shard has been recognized two years in a row for this prestigious award. The award is based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management, among other factors. “I just want to thank everyone who participated in the survey process,” Shard said. “My clients especially. I wouldn’t have been awarded this if I didn’t have the opportunity to provide them with the best service I can.”


Friday, July 25, 2014 8:50 pm.

Updated: 8:52 pm.


Saturday, July 26th, 2014 EN No Comments