FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
KEN FISHER: The Naive RIA World Is At Risk Of Being Taken Over By Broker-Dealers (ThinkAdvisor)
Ken Fisher, chairman and CEO of Fisher Investments that manages $50 billion in assets thinks the RIA world will be take over by broker-dealers."If you’re a BD, get out your knife and fork and get ready to eat the RIAs as dessert because that’s probably where it’s going," Fisher told Jane Wollman Rusoff in a piece for ThinkAdvisor.
"If you’re an RIA, you’d better get un-naïve: the RIA world is at threat of being taken over by BDs in a regulatory sense. There’s a good chance that the entire RIA world is gone in 10 years. The SEC doesn’t seem to understand what it’s doing."
"All the features of the potential fiduciary standard, including mandatory arbitration elimination, are likely to backfire and blow back — maybe fatally — on the naïve RIA world. BDs will likely subsume and exterminate the RIA world because the BDs would like to take it over: Money has been coming out of BDs and going into RIAs for 40 years. The RIA world has been growing rapidly at the expense of the BD world. And the BD world hates that."
THE US 20: Twenty Huge Trends That Will Dominate America's Future (Business Insider)
There are 20 huge trends that will dominate the U.S. according to Business Insider's Rob Wile. Here are 10 of them. 1. The Bay Area is the new place to be as money pours into firms in the region. 2. The U.S. has become a renting-and-sharing economy. 3. Texas is the new growth engine with new job creation and the shale boom boosting economic growth. 4. The rise of automation. 5. Energy costs are no longer growing. 6. Wearable technology is becoming mainstream and is expected to grow from 14 million devices shipped in 2011 to 171 million units by 2016. 7. "Old Hollywood is dead and old TV is dying." 8. The education bubble has burst. 9. "The unintended consequences of Obamacare." 10. "The end of men." The unemployment rate among men is higher than for women and the male/female share of the labor force is "within o more than two years of equalizing."
Investors Should Have A Sufficient Set Of Metrics Before Making Stock Selection Decisions (Vanguard)
Tom Stevens of Los Angeles Capital Management, who manages a third of the Vanguard Growth and Income Fund, said that during the financial crisis investors were focused on balance sheets and ignoring earnings and value metrics. "Had we not had a process that had the ability to focus on things like leverage and distress, yield and those types of characteristics, quite honestly it would have been very difficult to figure out how to, basically,
make our stock selections back then." Stevens says investors should make sure they have a "sufficient enough set of metrics" to make their stock-selection decisions.
Top Advisors See Their Pay Surge (Investment News)
Financial advisors that are also owners earned a median of $240,000, according to the InvestmentNews/Moss Adams 2013 Compensation and Staffing Study. That ups 17% from the 2011 study. Meanwhile, compensation for top advisors went up 12% in the same time period to a median of $134,000. In comparison, advisors that work under a top advisor earn a median of $81,332, down from $81,686 in 2011 .
EINHORN: Certain Aspects Of The Market Are Behaving Like We're In A Bubble (CNBC)
Speaking at the Robin Hood Investors Conference, Greenlight Capital's David Einhorn told CNBC that he doesn't "know which way the market is going." He also said, "there are certain aspects of the market and certain stocks that are behaving like we're in a bubble..."
In terms of his gold holdings, Einhorn said, he holds it "just in case something goes really haywire.""What I'm thinking about is mostly the monetary policies and the fiscal policies being run by the big economies."