Archive for September, 2015

Team of 7 Ex-Merrill Reps with $3.3B Goes Indie

Despite the choppy markets, advisor recruiting is on a tear.Despite the choppy markets, advisor recruiting is on a tear.

Seven former Bank of America-Merrill Lynch (BAC) advisors have launched Corient Capital Advisors, a boutique wealth firm with over $3.3 billion in assets under management. For its part, Merrill gained two ex-Wells Fargo (WFC) advisors with nearly $3 million in assets.

Chris Copps, Gordon Hassenplug, Darren Henderson, Michael Phelps, Alex Stimpson, Jon Tenney and Greg Walters, all former Merrill Lynch, formerly worked together in two teams at Merrill in its private banking and investment group.

The new firm is based in Newport Beach, California. It has partnered with Dynasty Financial Partners for its platform; Fidelity Investments will provide asset services to the group.

Merrill Lynch recruited Bob Krumholz and Becca Siegel from Wells Fargo Advisors. The two reps have joined a group led by Emily O’Connell and formed Oaks Wealth Management Group in Austin, Texas.

Krumholz and Siegel, who had almost $1.8 million in yearly fees commissions and $270 million in assets under management last year, will report to Tim Gillespie, market executive. Members of the newly formed Oaks Wealth collectively services some $481 million of client assets and $3.2 million in production last year.

Other Recruiting News

Wealth management and investment banking firm Noyes has brought in Peter Corey as a wealth advisor, reporting directly to James Lynch, managing director of wealth management.

Cory, the founder of Cory Investments, joins from J.P. Turner Co., where he most recently served as a registered representative. Earlier, he was vice president of investments at Williams Financial Group in Chicago; before that, he was a branch manager at Prudential. He began his career at Merrill Lynch in Chicago.

Rogers Financial, helmed by Kenneth Rogers, managing principal, has moved to Pensionmark Financial Group’s advisor support program in Washington, D.C.

The firm has been serving as an advisor to retirement plan sponsors for more than 20 years. It will maintain its independent business model.

The MetLife Premier Client Group of Florida says Jeremy Straub has joined it as a managing partner. He will be responsible for a team of 190 advisors with $3.7 billion in client assets under management.

Previously, he served as regional vice president with Ameriprise Financial (AMP), and oversaw a team of 177 advisors managing some $7.9 billion in client assets.

Read the Sept. 23 Recruiting Roundup at ThinkAdvisor.



Wednesday, September 30th, 2015 EN No Comments

Aventis Asset Management Hires Byers as Head of Business Development

Chicago-based hedge fund Aventis Asset Management has hired Keith Byers as managing director for business development. 

Byers brings twenty years of sales, marketing and client servicing experience in the managed futures industry to his new role at Aventis, according to a press release. Prior to joining Aventis, he was a managing director at Trigon Investment Advisors and Chesapeake Capital Corporation. 

At Aventis, Byers will be responsible for the strategic planning and implementation of all business development efforts for the company. 

“We are excited to add Keith to our team as he brings a wealth of industry knowledge and experience which will help us better serve our clients,” noted Steve Hwang, COO of Aventis. “We have built a strong team over the past few years and this addition underscores our commitment to our clients.”

Founded in 2006 by veteran commodities specialist and former CBOT floor trader Paul Kim, Aventis employs a fundamental, discretionary trading strategy focused on trading approximately twenty commodity markets across energies, grains, softs, metals and meats. The firm manages approximately $350 million in client assets.


Wednesday, September 30th, 2015 EN No Comments

Deutsche Bank Would Cut Yuan Risk From China Stocks With ETF

U.S. investors may soon be able to buy Chinese stocks without worrying about the effect of the increasingly volatile yuan.

Deutsche Bank AG’s wealth-management unit is planning an exchange-traded fund that removes the currency risk from owning shares listed on the Shanghai and Shenzhen stock exchanges, regulatory filings show. The fund, which will track a hedged version of the CSI 300 index, will mitigate its exposure to the Chinese currency using one-month forward contracts on offshore-traded yuan.

China’s shock devaluation of its currency last month sent foreign-exchange volatility soaring and prompted foreign investors to start considering the impact of the nation’s foreign-exchange policy on their investments. The central bank will weigh the previous day’s close, currency supply, and demand when setting the yuan’s reference rate, officials said at the time.

“Chinese equities remain an important portion of investors’ emerging-market allocation, and an ETF that could remove some of the risks associated with currency devaluation might be attractive to them in the long-run,” said Eric Mustin, vice president of ETF trading solutions at broker WallachBeth Capital LLC in New York.

Dodd Kittsley, head of ETF strategy and national accounts in New York at Deutsche Asset and Wealth Management, declined to comment on the planned fund as it is still seeking approval.

The yuan closed at 6.3571 per dollar in Shanghai on Wednesday, 2.4 percent weaker than before the devaluation.

An unhedged Deutsche Bank ETF that tracks the CSI index has about $385 million under management, data compiled by Bloomberg show. Investors yanked more than $700 million from the ETF since the beginning of June amid a stock rout that’s erased more than a third of the Shanghai Composite Index’s value.


Wednesday, September 30th, 2015 EN No Comments

PANC 2015: Adding Wealth Management to Your Practice

Asked whether advisers still look to add wealth
management and rollover business to their practice, in light of the proposed
fiduciary rule, David Kaleda, principal at Groom Law Group, said, “For plan
advisers moving into wealth management, that’s always been a tricky area. Under
the proposal, it will become even trickier because it broadens the definition
of those who are fiduciaries and includes rollovers.” Kaleda was speaking at
the 2015 PLANADVISER National Conference in Orlando, Florida, on the panel “Practical
and Legal Tips for Adding Wealth Management and Rollover Solutions to Your

“Under current law, there are exemptions that do allow you
to be paid, but they aren’t suited for rollovers,” Kaleda said. The new
proposal allows for a best interest contract exemption (BIC), but as it is now
structured, “almost no one can comply with it. This will certainly change in
the next six months to a year.”

As for cross-selling to participants, “Everyone is looking for a way to
monetize their relationship with participants through an IRA [individual
retirement account], and, due to the sheer number of Baby Boomers retiring over
the coming years, it is certainly going to happen,” said George Revoir, senior
vice president, distribution, at John Hancock Financial Services. “You can make
it an easier conversation, depending on how you look at it. John Hancock’s
retirement plans allow only for lump-sum distributions, so it is not hard to have
a conversation about an income option in an IRA rollover.”

The other option is for an adviser to suggest including lifetime income options
in a plan to keep retired participants invested, Kaleda said.

In the years
ahead, this is an option that advisers will need to consider, particularly for
large plans, Revoir observed.

NEXT: The appeal of
wealth management


Tuesday, September 29th, 2015 EN No Comments

Bull market just taking a breather: Analyst

“We actually think this might the first year in a while when we have a significant negative print on stocks,” Lori Heinel, chief portfolio strategist at State Street Global Advisors, said in the same interview.

U.S. equities have been on a roller-coaster ride recently as global growth concerns shake investors’ confidence. In fact, all three major indexes have dropped more than 8 percent this quarter, while the Dow Jones industrial average has shed about 10 percent in 2015.

Another issue concerning the markets has been the Federal Reserve and whether or not they’re going to raise interest rates for the first time in nearly a decade.

“Our view is that they should raise rates, and we do think that they are going to raise this year,” Heinel said. “In a perverse way, that will signal that things are not as dire as a lot of people fear.”

This week has already featured a slew of Fed officials sharing their thoughts on monetary policy, including Chicago Fed President Charles Evans, San Francisco Fed President John Williams and New York Fed President Bill Dudley.

In his remarks, Dudley said the central bank will likely raise rates later this year, while Williams cited near-full employment in his argument for a 2015 hike.

Evans, on the other hand, argued that the best time to raise rates would be in the middle of next year.


Tuesday, September 29th, 2015 EN No Comments

Robo-advisory aims to become more targeted as Ellevest secures funding for …

Ellevest is looking to take a new twist on the explosion of excitement around robo-advisory. The just-announced platform, which received $10 million in Series A financing, will launch a robo-advisory site targeting women in early 2016.

The platform had help gaining attention of potential investors by the strong name recognition of its founder, Sallie Krawcheck, who formerly headed Bank of America Wealth Management and Citi Wealth Management before that. She will serve as the new platform’s CEO.  

Charlie Kroll, who founded cloud-based customer acquisition technology company Andera, which was sold to Bottomline Technologies last year, is co-founder of the Ellevest platform and will serve as president and chief operating officer.

The $10 million funding round was let by investment research firm Morningstar, and included funding from former PIMCO CEO Mohamed El-Erian; president and CEO of MasterCard Ajay Banga, Brian Finn, former president of Credit Suisse First Boston; and Robert Druskin, executive chairman of the DTCC and former chief operating officer of Citigroup.

“It’s time to turn our attention to another gender gap: the investing gap,” Krawcheck said in a statement. “It’s time to give women an investing experience built specifically for them.”

Details of the platform and its features have not yet been released. Its announcement comes just months after the August announcement of the launch of SheCapital, founded by Tina Powell, who serves as director of business management for Hackensack, New Jersey-based registered investment advisor Beacon Wealth Management.

SheCapital focuses on the novice female investor, emphasizing financial literacy, and adopting approachable, easy-to-understand language, resources and automated tools. The site also donates 10 percent of its profits to She’s the First, a non-profit organization that sponsors girls’ education in developing countries.

Alexa von Tobel, founder of LearnVest has suggested that in starting her company she was also motivated to help women better understand their finances after watching her mother struggle to get up to speed with the family finances after her father’s death. LearnVest, however, does not target that segment of the market exclusively.

It remains to be seen whether the robo-advisory business can succeed in a more targeted niche model. The Web site RIABiz quoted an unidentified head of another robo startup as suggesting the targeted niche would be a challenge.  Still, Krawcheck has the advantage of strong Wall Street connections in bringing her concept to market. So far, her investors seem impressed with the concept and business model.

“Sallie and Charlie have put together an outstanding team with the drive to successfully execute this vision, addressing the unique financial needs of women,” Joe Mansueto, CEO of Morningstar Inc. told RIABiz in an email.

For more:
– read the RIABiz article
– read the ThinkAdvisor article
– read the Fortune article

Related Articles:
Betterment opens new frontier with online-only robo 401ks
BlackRock gets a robo-advisor with FutureAdvisor acquisition


Tuesday, September 29th, 2015 EN No Comments

HighTower’s Blueprint for Growth Wins "Non-Custodian Support Platform …

Visit PR Newswire for Journalists, our free resources for releases, photos and customized feeds. You can also send a free ProfNet request for experts.


Monday, September 28th, 2015 EN No Comments

Stay away from commodities and companies ‘gorging on debt’: Portfolio manager

Markets are “sour and grumpy” and investors should sit tight and protect their portfolios from risk by avoiding commodity stocks, Barry Schwartz, Chief Investment Officer and portfolio manager, Baskin Wealth Management tells BNN.

“It’s possible this big China growth story is over and if that’s the case you don’t want to be in the commodity space,” he tells BNN.

Commodity stocks – particularly in the metals and mining space have been hit hard by slowing Chinese growth. Shares of global mining giant Glencore have been cut nearly in half over the past month as investors worry persistently low commodity prices will cripple the company’s debt-laden balance sheet.

“Don’t buy things like Glencore, don’t buy companies gorging on debt. Stay away from companies in the commodity space,” he says. “These companies may be the best managed in the world but they have no control over the commodities they sell.”

Baskin recommends investors focus on companies selling goods and services that consumers use every day. Investors should also be wary of companies with high dividends – and instead should focus on companies with lots of free-cash flow.

Investors who are frustrated by negative returns in their portfolio should avoid unnecessary trading to try to boost their returns, says Baskin.

Investors need to diversify their portfolio and then sit on their hands.

“Inaction is the best action when markets are sour and grumpy,” he says.


Monday, September 28th, 2015 EN No Comments

Gold Traders Have Nothing to Fear


The Market's Measure

In times like these, everybody’s eying VIX, the oft-tagged “fear index.” VIX, divined from the volatility embedded in SP 500 index options traded on the Chicago Board Options Exchange (CBOE), represents the expected movement in the underlying benchmark over the upcoming 30-day period.

Historically, VIX hangs out at the 20 level, meaning an annualized volatility of 20 percent. Upward spikes in the metric signal option traders’ “padding” of premiums to cover the risk of anticipated price variations. VIX, for example, spiked above 40 in late August as China-related fears gripped the market. VIX, as a testament to mean reversion, has been drifting downward ever since.

VIX isn’t the only fear index, though. The CBOE also calculates an indicator for the gold market. The CBOE Gold ETF Volatility Index, or GVZ, applies the VIX methodology to options on SPDR Gold Shares (NYSE Arca: GLD).

GVZ, like VIX, has averaged a reading of 20 or so over the past several years, but with a lot less, um, volatility. GVZ spikes tend to be smaller, but nonetheless offer insight into traders’ thinking. Big moves, like the 2008 run-up signaled a bullish turning point for GLD, just as a smaller 2001 advance that heralded GLD’s eventual weakening, can be seen easily on the chart; minor variances require monitoring GVZ’s 10-day moving average.



Gold caught a bid last Thursday, thrusting GLD above the $110 level for the first time since July. Volatility traders took note of a concomitant flash pick-up in GVZ. Spotting a 10 percent excursion above GVZ’s moving average, punters sold GLD down for a one-day gain of nearly two percent.

Two percent may not sound like much, but these opportunities crop up, on average, once every fifteen  trading days. A few trades like these and, to paraphrase Everett Dirksen, you’re talking about real money.      


Brad Zigler is REP./WealthManagement’s Alternative Investments Editor. Previously, he was the head of marketing, research and education for the Pacific Exchange’s (now NYSE Arca) option market and the iShares complex of exchange traded funds.

Discuss this Article 1

“Big moves, like the 2008 run-up signaled a bullish turning point for GLD, just as a smaller 2001 advance that heralded GLD’s eventual weakening”

Speaking of GLD, Anyone know why there is a clause in the GLD prospectus that states GLD has no right to audit subcustodial gold holdings? Why would the organizations behind GLD forfeit this right and create such a glaring audit loophole? I have not heard a single good reason for the existence of this loophole thus far. It also doesn’t help that GLD claims to be fully backed by physical gold bullion but yet it refuses to give retail investors the right to redeem for any of these ‘claimed’ gold bullion. There are a number of other red flags as well from what I’m reading:

“The GLD prospectus fails to specify around how much of GLD’s gold is insured but it does give you this clause “The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody.” As I wanted clarification on this subject, I called GLD’s info line. The GLD representative acted as if he didn’t know and said they were just the “marketing agent” for GLD. What kind of marketing agent doesn’t know such basic information about a product they are marketing? It seems like they are deliberately hiding information from investors. These representatives behind GLD sure doesn’t seem to be the most honest types. Anyone share a similar experience? Thoughts?

I also recall there was a well documented visit by CNBC’s Bob Pisani to GLD’s vault. This visit was organized by the management behind GLD to prove the existence of GLD’s physical. However, the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not show up on the bar list dated at that time. It was later discovered that this “GLD” bar was actually owned by ETF Securities.”

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Monday, September 28th, 2015 EN No Comments

Abhay Aima | The advisory business is still evolving

Abhay Aima’s business card lists out four business segments that he is the head of. This shows his depth of experience. Yet his business card descriptions aren’t what define him. He is actually uncomfortable using more than one part of his long designation. Aima, group head, equities and private banking group, third-party products, NRI (non-resident Indian) and international consumer business, HDFC Bank Ltd, spoke to Mint about the evolving landscape of wealth management for ultra-high-net-worth individuals (UHNIs) and also what it takes to make a good advisor. Edited excerpts:

How open are UHNIs towards bankers and advisors giving them money management inputs?

The business of advisory has evolved over a period of time. In earlier days, the concept wasn’t there. As our economy has changed, so has the concept of managing money. Traditionally, money was with business families, which was a difficult segment to crack—the best thing for them to do was take the profits and reinvest in their businesses. The failure rates for Indian businesses were also low. Essentially, personal wealth rarely got impacted. Moreover, surplus simply went towards gold and real estate.

That has changed drastically. Businesses started failing. Secondly, money got made by the salaried class as well, whether through ESoPs (employee stock option plans) or through larger take-home salaries. On the other hand, traditional business setups saw the next generation taking over the reins and their outlook and approach was different.

Both these developments led to a rise in people looking for professional money managers. The salaried class provided a good opportunity as they represented first generation wealth, didn’t have time on their hands to manage money and understood the need for a professional.

The landscape of the advisory business is still changing. Asset allocation, for example, was an alien concept, so was the systematic investment plan. Up until a few years ago, it was more about shall I enter the equity market or shall I exit; it was never about understanding the allocation to equity at various points in time.

Do clients actually follow and stick to an asset allocation?

Traditionally, if you had a safe business, then why should one need an asset allocation? The other thing was that property and gold prices never went down. And the stock market was called satta bazaar (gambling den). There was no concept of asset allocation. The reality, though, is different now.

Gold prices are falling, people have burned their fingers in property and those who have stayed with equity for long have made money. Now, it is much easier to implement as wealth has moved to the salaried and next-generation entrepreneur; yet, there is a mindset which has been built over years and that needs to change.

Among UHNIs, there is access to information across products and an understanding of asset behaviour. Now, the focus is shifting from specific products to overall portfolio structure and money management. Being part of a bank, how does this affect you?

Earlier, both the advisor and the investor were happy with just products. Conceptually, it has taken time for wealth advisors to understand that low-hanging fruit isn’t always the answer. It is tempting to look at the immediate commission earned on a product rather than keeping the profile of the investor and the risk appetite in mind. You will make money immediately but it doesn’t pay over the long term. Ideally, what happens is that when an advisor approaches an UHNI, no matter how well established the organization he represents or the person’s skill, the client will not trust the advisor on Day 1. If you are very convincing and come with great credentials, at best you can get 20% of the investor’s wallet share. Over three-four years or so, if you manage to do a good job, then one may get 70-80% of the wallet share. This means you can’t be focused on short-term earnings and have to focus on the client’s interest. Only then does it become an easy ride. The moment a wealth advisor realizes this dynamic, it works. But it requires effort to get that first 20%. This is something that advisers still need to understand.

How does one private bank distinguish from another given that the overall product basket is accessible to all?

Ideally, what we just spoke about is that the focus needs to be on not looking at short-term earnings and aligning your needs with the client’s. That is easier said than done. Secondly, a distinguishing factor is how much you take the temptation away from the relationship manager. If you are able to centralize product recommendations and keep it independent of sales, then there is value. Advisors with a sales focus will always try to sell what is easier and has a high commission.

Transparency and trust is critical; how much return you are able to generate comes later. If the wealth manager could maximize returns for everyone, then she would be doing it for herself rather than others. We tell our advisors that the client has probably done better than them, otherwise she would be coming to us rather than us seeking her out.

The value an advisor adds is plugging the gap of time—which a client doesn’t have—to focus on personal wealth management.

Service levels are also a differentiator. If these are taken care of, even if a client has made a loss, they won’t walk away if you have been honest and diligent.


Sunday, September 27th, 2015 EN No Comments