Financial advisors often promote their services by saying that they can help remove emotions from investing. In theory, advisors can use a variety of risk management tools, knowledge of capital markets, and long-term investing perspectives to help their clients avoid making costly knee jerk reactions.

Brexit is just one example, but it can be a powerful case study for advisors seeking to help clients understand why emotions should be curtailed by financial professionals who are armed with capital markets expertise.

In the months leading up to the Brexit referendum, markets climbed and declined in response to changing expectations for how the country’s citizens would vote. In the final days before the vote, investor sentiment strengthened as pundits increasingly said a vote in favor of the U.K. pulling out of the European Union was unlikely.

Many investors had previously feared that Brexit would hinder economic growth in Europe and create a challenging environment for U.S. companies and business in other countries that sell products in the continent.

Indeed, Brexit is likely to mean that U.K. will have to forge new trade agreements with individual members of the European Union and is likely to have to do the same with U.S. exporters.

When the Brexit referendum surprisingly determined that voters want to leave the U.K., panic ensured. On June 24, when the results were released, U.S. equities dropped approximately 3%. It was the worst single-day decline for the S&P 500 in nearly a year and wiped away the index’s gain for 2016, according CNBC.

By the end of June 27, the index had dropped 4.07%. The decline, however, was only temporary. Indeed, during the last three days of June, the S&P climbed 4.95% and, as of July 8, had generated a total return of 4.21% year-to-date.

Investors who panicked by selling in the days immediately after Brexit are likely to have sold during a dip, only to miss the strong returns when equities bounced back. With that in mind, advisors should explain to their clients that panic selling often results in selling low and then missing out on the strong returns that typically follow market dips.

They should explain, furthermore, that using portfolio diversification to cushion declines, maintaining a long-term perspective, and understanding the role of corporate fundamentals can go a long way in helping investors avoid panic selling.

Advisors should develop illustrations that show how having a mix of asset classes could have reduced the impact upon a portfolio of the post-Brexit market decline and that portfolio rebalancing may have resulted in buying equities during the market dip.

They should also show index performance numbers that illustrate how riding out historical market declines, including the correction associated with the Great Recession, would have allowed investors to recoup losses and then eventually achieve additional gains.

Finally, advisors should point out that corporate fundamentals don’t justify a major prolonged market correction. While overall corporate earnings in the U.S. have taken a hit due to cheap oil, many industries, such as Information Technology, are experiencing strong sales and improving profits.

Innovation, meanwhile, is allowing companies like Amazon.com and Netflix to rapidly grow their earnings by disrupting traditional business models with technology. At the same time, corporations are holding near record levels of cash, which is allowing them to buy back stock, launch dividends, and conduct mergers and acquisitions at near record levels.

All of those actions provide additional support to stock prices. The U.S. economy is also likely to support corporate fundamentals. While U.S. economic growth has been slow, many developments are encouraging, with the labor market strengthening, real estate values increasing, and consumers’ finances improving.

Collecting Social Security early can help retirees assess how much they can spend because the payments are consistent. So reports Wealth Management.

Also, proponents of waiting typically point to the 8% payment increase you get for delaying the payments. However, the nominal annualized reture when waiting a year is less than 8% and retirees will miss out on a full year of payments. 

Lastly, collecting Social Security may be more attractive than withdrawing money from an IRA when considering taxes.

Read the full article from Wealth Management.

The Securities and Exchange Commission recently awarded a whistleblower $3 million for information that helped the regulator crack a complex case of fraud. So reports ThinkAdvisor. The program was established more than three years ago and has paid out more than $50 million to whistleblowers.

Read the full article from Think Advisor.

Robert Renshaw has joined Edison, N.J.-based Fountainhead Capital Management as senior financial strategist. So reports TapintoEdison.

Fountainhead Managing Partner Marc Rock says Renshaw’s strength involves understanding each client’s unique circumstances and partnering with the appropriate team members to create customized strategies.

Read the full release from TapintoEdison.

Invesco has filed an exemptive order to license Fidelity’s active, non-transparent equity ETF methodology. So reports Think Advisor.

“The partnership between Fidelity and Invesco will build on both firm’s shared heritage of innovation and strengthen Invesco’s ability to help achieve better outcomes for investors,” Invesco said, according to the article.

Invesco launched its first active transparent ETF in 2008.

Read the full article from Think Advisor.

The financial markets are upended again for the second time in the last 12 years, although the underlying reasons for the volatility are quite different. 

A recent article from CNBC outlined three major differences between then and now and what those differences mean for financial advisors moving forward. 

1 – Banks to Blame

During the Great Recession, the banks were largely to blame. The banks approved mortgages for subprime borrowers in unprecedented numbers, inflated their profits, minimized their risk and ultimately created a housing market bubble that burst. This time around, the market volatility is largely due to uncertainty created because of the virus’ impact. Even though Jerome Powell, chairman of the Federal Reserve, said the economy could contract by as much as 30% during the second quarter, banks are better equipped to weather this storm. For comparison, the biggest quarterly drop during the Great Recession was 8.4%.

2 – Quick Draw

During the Great Recession, Lehman Brothers was allowed to collapse. The Bush and Obama administrations took action—by providing liquidity through TARP and offering fiscal stimulus to the tune of $941 billion.

In the current crisis, the Federal government acted much quicker. The Federal Reserve cut the federal funds rate to almost zero, and kicked off a corporate bond buying program. The Federal government also passed numerous relief and stimulus packages, including a $2 trillion stimulus package in March alone, the month the outbreak exploded in the U.S.

3 – Market Freefall

During the Great Recession, the major stock indexes fell 50% over an 18 month period, which caused many investors to ditch the markets and ultimately miss out on the rebound.

The market freefall during this crisis was much more swift, leaving many investors shellshocked into inaction. For example, the S&P 500 dropped by 34% between Feb. 19 and March 23, the quickest descent into a bear market in history.

Read the full article from CNBC.

Despite wild volatility for weeks, the majority of financial advisors expect it to still get worse before it gets better. So reports CNBC.

An overwhelming 81% of advisors polled by Ned Davis Research say they think we have yet to hit bottom. They expect the S&P to continue to fall below its March 23rd levels. At that point, the S&P was down 34% from its Feb. 19 high mark.

Meanwhile, more than half expect the market to bottom out by the end of May, while one in four think it will occur later.

Read the full article from CNBC.

Many advisors have seen crisis before, including Black Monday and the Great Recession, but the coronavirus global pandemic is uncharted territory. So reports Bloomberg.

Not all clients have the same goals. Here are some of the biggest questions FAs are getting and a sampling of how they’re handling them

Is it time to buy?

Susan Kaplan, an RIA in Newton, Mass., says she’s been “holding people back” because she foresees more volatility until the outbreak is over. She caters to clients with net worths of $10-$12 million

‘Is it time to sell?’

Leon LaBrecque, chief growth officer at Sequoia Financial Group, says half of his calls are about buying opportunities, while the other half are from concerned clients. He says the concerns are financial, but also about the virus and how it impacts his clients' careers and their lives in general. His advice about their accounts: sit tight, for now.

‘Should I be scared?’

Steve Morton, of Captrust Financial Advisors, says his clients “set aside five years of money for income” and use the rest of their money to invest in actively managed stock and bond. This approach provides them with income for the next half decade. “Certainly within five years we’re going to come up with a vaccine for this. That calms them down," he told Bloomberg.

Read the full article from Bloomberg.

Of the firms that received loans from the Paycheck Protection Program (PPP) exceeding $150,000, more than a thousand are financial advisors. That’s according to data from Small Business Administration and Department of Treasury. So reports Forbes.

Financial Advisor Magazine says more than 1,400 registered investment advisors (RIAs) took PPP loans. That includes 28 of the top 100 advisory firms and who have assets under management of between $1.8 billion to $12.4 billion.

Some of the biggest loans are as follows: 

• SVA Wealth Management (Madison, WI) took two loans for different parts of the business totaling between $3 million and $7 million. 
• Steward Partners (Washington D.C.) took a loan of between $5 million and $10 million.
• Carson Wealth (Omaha, NE) received a loan of between $2 million and $5 million.

The largest RIAs most frequently took loan amount of between $350,000 and $1 million. They include:

• Sawtooth Solutions (Minneapolis, MN)
• Independent Advisor Alliance (Charlotte, NC)
• Focus Financial Network (Minneapolis, MN)

Ten advisors look loans of between $150,000 and $350,000, including:

• LAMCO (Lake Mary, FL)
• Smith Shellnut Wilson (Ridgeland, MS)
• InterOcean Capital (Chicago) 

Four firms took loans of between $1 million and $2 million, including:

• RegentAtlantic (Morristown, NJ)
• SignatureFD (Atlanta, GA)

Read the full article from Forbes.

Wells Fargo recently banned its employees from downloading and using the popular social media apps on its company equipment. So reports Investment News. 

The company found a small number of its workers were using TikTok, which is owned by Chinese company ByteDance, on Wells Fargo devices. The app has about 80 million active monthly users in the U.S. 

“Due to concerns about TikTok’s privacy and security controls and practices, and because corporate-owned devices should be used for company business only, we have directed those employees to remove the app from their devices,” a Wells Fargo spokesperson told the publication.

Separately, hactivist group Anonymous has urged Americans to dump TikTok, according to an article from Forbes. “Delete TikTok now, if you know someone that is using it, explain to them that it is essentially malware operated by the Chinese government running a massive spying operation,” the Anonymous account tweeted on July 1.

TikTok has always been controversial. India, for example, has banned TikTok and 58 other Chinese apps. Increasing the concern is that TikTok has multiplied its fame and influence during the pandemic.

Edward Jones ranked No. 1 among investment firms for customer experience in The US Customer Experience Index, 2020. This is the fifth consecutive year the firm has received the highest spot on the CX Index among investment firms from Forrester Research, an independent research firm. 

Forrester's Customer Experience Index (CX Index™) methodology measures how well a brand's customer experience creates and sustains the loyalty of its customers. In addition to the No. 1 ranking overall, Edward Jones finished highest in the categories of Customer Service and Clear Communications among investment firms. And the likelihood of recommending their investment firm was highest among Edward Jones clients.

"We strive to build deep personal relationships with every one of our clients. It begins with understanding what is most important to our clients, then how, when and where they want to be served, which helps us deliver an ideal experience for each client," said Ken Cella, Edward Jones principal for the Client Strategies Group. "But more than that, our relationships are based on truly listening to our clients so that we can understand their goals and motivations and ultimately build personalized solutions that holistically support their life's goals."

The ranking was based on responses from 15,765 US individuals measuring 21 brands in the investment firm industry. The proprietary survey results are based on consumers' opinions of the experiences with the brands in the survey.

Read the full press release here.

Robinhood is making multiple changes in the wake of the suicide of one of its customers who suffered massive losses. So reports CNBC.

The customer, 20-year old Alex Kearns, threw himself in front of a train after he believed he suffered $730,000 in losses. In his suicide note, Kearns, a sophomore at the University of Nebraska at Lincoln, accused Robinhood of allowing him to pile on too much risk. It is unclear whether Kearns actually lost $730,000 or whether he misread the financial statement.

In response, Robinhood, a free-trading app, announced it would be making changes. It will increase eligibility requirements and “consider additional criteria” when it comes to more sophisticated options trading. It will also update its user interface and improve its messaging and communications.

The company also announced it is donating $250,000 to the American Foundation for Suicide Prevention. 

Read the full article from CNBC.

The coronavirus has caused a lot of changes, including the way FAs communicate with clients. And, some of those changes may be permanent. So reports Think Advisor.

In fact 57% of investors noted in a recent poll that communications with their advisor has changed, and 62% say they would keep at least some of the new methods after the pandemic ends. Those new methods include phone calls, emails, video chats, text messages, social media, snail mail and even in-person.

Read the full article from Think Advisor.

Do you have more work than you can handle? Need to hire staff to help? U.S. News & World Report has some tips for you.

Meredith Moore, founder and CEO of Artisan Financial Strategies, said she realized she needed to hire a junior advisor who could work with clients who didn't fit her ideal profile. However, she needed an advisor that had an outlook that aligned with her own. 

Instead of simply placing a help wanted advertisement, she created a paid one-year intensive class focused on practice management. The class had strict rules on attendance and assignments. Candidates had to watch videos, listen to podcasts, and other work that required hours of study. 

Moore also didn’t require the candidate to bring over a big book of business. Instead, she split her cases with him. "There is a misconception that AUM means everything when considering hiring advisors, but actually there are other qualities that often outweigh the importance of AUM," says Ryan Shanks, co-founder and CEO of FA Match, according to the article. 

Shanks also said that hiring a newer advisor gives a firm the opportunity to better mold the individual when it comes to a firm’s culture and when dealing with clients. 

Stoy Hall, for his part, knew he needed to hire two junior advisors. Hall is the executive director and senior wealth advisor at Centric Wealth. He found one junio advisor while speaking on a college campus and the other via LinkedIn after a correspondence over a period of time.

He says that hiring can be difficult. “I learned that not everyone is fit for this industry,” he said, according to the article. “Some people need to experience the corporate side over the independent side." He also said that not everyone is cut out to be in an advisory role, but that doesn’t mean they might not be valuable to your firm. Therefore, advisors should consider what non-advisory roles someone may be able to fill if they seem like they can bring value to a firm.

Other places, like Wambolt & Associates Wealth Management Partners, operate an internship program with the goal of identifying college students close to graduation who may make good hires later on.

Read the full article from U.S. News & World Report. 

A survey of 300 U.S. financial professionals by Natixis Investment Managers found that many advisors feel they need to improve their client-relationship skills. So reports CNBC.

“It’s about being stronger at actively listening and understanding what clients are really saying,” said Dave Goodsell, executive director of Natixis’ Center for Investor Insight, according to the publication. “You’d think if you do that, you’ll have clients with you for a longer period of time.”

Advisors also have a number of views on what they need to do to improve client relationships. They include:

• Getting to know family members and heirs of clients (53%)
• Helping clients avoid making emotional decisions (46%)
• Providing advice beyond investments (41%)
• Managing expectations (37%)
• Client communications (28%)

Read the full article from CNBC.

A new survey from TD Ameritrade finds that 40% of brokers say they’re more likely now to go independent than they were six months ago. So reports U.S. News & World Report.

The survey also found that 39% favor a merger or acquisition, while 25% prefer to start their own business. Another 19% want to join an existing firm as an employee, while 17% want to partner with a technology provider or other service firm.

However, the pandemic and market turbulence is delaying the plans for about a third of the respondents.

Read the full article from U.S. News & World Report.