FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
SHILLER: I Tell People To Get An Investment Adviser (The Wall Street Journal)
When asked if he tells investors that they can pick winners in the stock market — or whether they should go to index funds because they can't pick winners — Robert Shiller told the WSJ's David Wessel, "I tell people to get an investment adviser. That makes sense to me.
"The question is often whether it's possible for anyone to pick stocks, and I think it is. It's a competitive game. It's like some people can play in a chess tournament really well, but I'm not recommending you go into a chess tournament if you are not trained in that, or you will lose. So for most people, trying to pick among major investments might be a mistake because it's an overpopulated market. It's hard. You have to be realistic about how savvy you are. But if you are thinking about buying real estate and renting it out, fixing it up and selling it, that's the kind of market that's less populated by experts. And for someone who knows the town, that's doing business, I'm not going to tell someone not to do that."
Wealthy Under-40 Clients Pay More Importance To Advisers' Ability To Assess Human Needs (Investment News)
A survey of high-net-worth people under age 40 — conducted by SEI Investments Co., Scorpio Partnership, and NPG Wealth Management — showed that they place more importance on human factors. "Understanding of individual needs, level of experience, and market knowledge" each received a score of 65 out of 100, reports Joyce Hanson at Investment News. They attached less importance to digital technologies. "The most significant study result to me is that you just can't replace the importance of human contact in the advisory experience," Al Chiaradonna, of SEI Wealth Platform for North America, told Hanson.
Apparently There's A 'Goldilocks' Hedge-Fund Size (Business Insider)
Hedge funds with $100 million to $499 million in assets under management (AUM) and $500 million to $999 million in AUM have had 12-month average returns of 13.79% and 13.71%, respectively. These funds beat bigger hedge funds in 12-month average returns in 2013, according to a report by Preqin. Meanwhile, hedge funds with $1 billion to $5 billion in AUM had 12-month average returns of 12.08%.
"As funds become larger, the distribution of returns among the best performing funds moves towards the lower end of the return spectrum," Amy Bensted, Preqin's head of hedge-fund products, said in the report.
"The size range $500-999mn had the lowest proportion of funds suffering a loss in 2013, and the longer term return and volatility characteristics of these funds are similar to funds with assets of more than $1bn. Therefore, those investors which are looking to move away from investing in just the largest funds, but without taking on too much volatility, may choose to look towards investing in those funds with more than $500mn in assets."
Morgan Stanley Duo Managing $1.2 Billion Joins Lebenthal Wealth Advisors (The Wall Street Journal)
Carrie S. Gallaway and Andrew L. Stern, who managed $1.2 billion in client assets at Morgan Stanley, have left to join Lebenthal Wealth Advisors, reports Corrie Driebusch at the WSJ. The duo have "received partnership and an equity stake in Lebenthal Holdings LLC, the parent of Lebenthal Wealth Advisors," reports Driebusch. Jimmy Janeczek, Leigh Moglia, and Alexander Tuason also joined as vice presidents of wealth management.
Want To Retire With $1 Million? Here's How Much You Should Already Have Saved (Business Insider)
"Assuming a 6% annualized rate of return and a monthly contribution of $400 starting at the indicated age, this chart shows the savings balance you need by that age in order to get a total of $1,000,000 by the time you are 65 and ready to retire," writes Business Insider's Andy Kiersz.
