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.

Currently, independent Registered Investment Advisors allocate 9% of client funds to crypto investment. So reports Forbes.

Financial advisors, overall, allocation only 6% of client assets in cryptocurrencies. However, a new survey suggests FAs might double their investment in crypto this year. Many financial advisors (54%) find Bitcoin attractive because of its lack of correlation to other asset classes. There is also a $50,000 Bitcoin price prediction for 2020.

Bitcoin currency is going in the right direction. However, FAs also express concern about crypto allocations. They include:

• Regulatory concerns (56%)
• Too volatile (43%)
• No idea how to value cryptocurrencies (41%)
• Lack of easily accessible investment vehicles like ETFs or mutual funds (39%)
• Custody concerns/fear of hacks (34%)
• Lack of understanding (31%)

Read the full article from Forbes.

In a recent survey by Edelman, 84% of institutional investors said maximizing shareholder returns can no longer be the primary goal of a corporation and 71% of respondents said companies that overemphasize shareholder returns will be partially responsible for consumer or employee activism. So reports 401kSpecialist.

Edelman's research indicated more institutional investors are choosing to invest in firms that embrace  Environmental, Social and Governance (ESG) practices. The study surveyed a total of 600 institutional investors in Japan, Canada, Germany, the Netherlands, the U.S. and the U.K.

Read the full article from 401kSpecialist.

U.S. sales of individual non-variable deferred annuities totaled $29 billion in the third quarter, an approximately 12% decline from the same period a year ago, which could be a result of lower interest rates. So reports Think Advisor.

When the spread narrows between the returns annuity companies can earn and what they pay to annuity owners, insurance companies may raise their product prices, trim product features or curtail sales.

Read the full article from Think Advisor.  

Interactive Brokers has launched fractional share trading for nearly any U.S. stock to provide increased access and flexibility to clients. So reports Wealth Management.

Other firms that offer fractional trading include Motif, M1 Finance, Folio Investing, Betterment, and Stash.

Read the full article from Wealth Management.

When Douglas MacLean was 23, he began his financial advisory practice with the Barnum Financial Group. Business went well for the next few years until, in 2017, his mother was diagnosed with early onset Alzheimer’s disease.

At 61 years old, the diagnosis caught his family by surprise and eventually led MacLean to make some changes to his practice based on his experiences with his mom.

I realized that as a financial advisor, my most valuable contribution would be learning what we could and should do financially to prepare for a much different future for our mom and family,” he writes for Financial Planning. “It was clear that our family needed a long-term financial plan that would meet changing needs as the disease advanced and address issues such as care giving, long term care, housing and possible life insurance for family caregivers.”

He began organizing documents, such as wills, and had many family meetings with lawyers. “I remember how difficult and emotionally draining those meetings were,” he writes. His research put him in contact with a range of professionals in a number of fields like home care and adult day services.

“While all this was done on behalf of my mother, I was gaining in-depth perspective that could benefit many individuals and families who have a family member or friend with Alzheimer’s,” he writes. “When I begin my work with clients at Barnum now, whether Alzheimer’s is present or not, I am much more aware and sensitive to different challenges that can arise.”

He adds that he tried to meet with his clients’ entire family, including any children, so that everyone involved has a full picture of possible needs and solutions.

Read the full article from Financial Planning.

The racial wealth gap is growing wider in America, with whites more likely to own a home than Blacks and Hispanics. For Black Americans, in particular, it is difficult to accumulate wealth. So reports Forbes. 

Dana L. Wilson has made it her mission to do something about the disparity. A New York City-based investment advisor and Wall Street veteran, Wilson created Changing How Individuals Prosper (CHIP) “to transform diversity and inclusion in the industry.”

“Right now it’s a platform that’s functioning as a database of Black and brown financial advisors and certified financial planners’” Wilson tells Forbes. “So, really right now, we’re building out our professional database so we’re looking to get as many financial advisors and certified financial planners of color on the platform. Once we get to our goal number, we will release it to the public”

Wilson says CHIP is important because “it’s really hard to be able to build out a business when you don’t have the support, when you don’t see people that look like you sitting in those seats, sitting in those senior management positions…it becomes even more difficult when you’re trying to make your goals and deadlines…”

Read the full article from Forbes.

Stifel’s aggressive recruiting push appears to be extending into 2020. So reports On Wall Street.

Stifel, a regional broker-dealer, has hired three advisors from Wells Fargo. Combined, the advisors manage $217M. The new hires include:

• Robb Adams, who had spent 19 years at Wells Fargo, and oversaw $95 million
• Montgomery Meeks, who oversaw $63 million in client assets
• Brad Ransom, who oversaw $59 million 

All three men began their careers at A.G. Edwards.

Stifel has been recruiting talent, mostly from wirehouses. Last year it nabbed a $1 Billion team from Fort Worth, Texas, from Merrill Lynch.

Read the full article from On Wall Street.

Newly-named Twenty Four Wealth Management has joined LPL Financial’s broker-dealer and hybrid registered investment advisor (RIA) platforms and aligned with Stratos Wealth Partners, an existing enterprise firm that supports the operations and growth of LPL-affiliated advisors. The advisors serve more than $460 million in brokerage and advisory assets*. They join from MassMutual Financial Advisors.

The New York City and Fairfield County, Conn.- based team of experienced financial advisors was founded by Anthony Truino, Michael J. Carbino, and John Dougherty, and includes Christopher Zapata. They are assisted by a seven-member support staff. Formerly associated with Barnum Wealth Management, the business established its new name with the move to LPL Financial and Stratos Wealth Partners.

The team’s planning focus and approach to putting the client at the heart of everything they do have been key to their success, according to LPL. Truino noted the move to Stratos allows them to act like their client’s CFO. “We run their financial life and, in doing so, constantly strive to provide the best advice and options given their unique situations,” he said. “It makes sense then that we should have access to industry-leading resources, innovative technology and a broad landscape of product platforms, which we can access through Stratos and LPL, while also having the flexibility and control to make decisions best suited for our clients and our business.”

With a targeted message and approach, the business provides comprehensive wealth management services to executives, professional athletes and business owners—individuals short on time who place high value on the team’s experience to manage this important aspect of their lives. Twenty Four Wealth delivers approximately 300 financial plans each year for their existing client base. “We encourage clients to run their finances like a business focused on three important cornerstones: their vision, values and goals. Backed by a sound business plan (the financial plan), our clients can see how they can work toward their vision by hitting their goals. All the while, being aligned with the values they hold close to heart,” Zapata said.

Read the press release.

Financial advisor Liz Miller encountered a problem many financial advisors likely face. After the death of her client, she took on the widow as a client and quickly realized her new client needed more help than she could provide. So reports CNBC.

The client hadn’t been involved in the family finances in a long time and needed help with the basics of managing money. Miller had learned of the niche business of daily money managers and connected her client with one she vetted.

“This person helped our client regularly look at her bank accounts and bills, set up an organization process and understand her living expenses,” Miller said, according to the CBNC article. “It ended up being a fabulous fit.”

This service is still niche and the CNBC article notes that the exact number of professional daily money managers is not known. However, The American Association of Daily Money Managers “has about 700 members—all of whom must agree to a background check—scattered across the U.S., with a few in Canada,” according to the article. Fees range from $75 to $150 an hour.

“They aren’t a replacement for other professional services,” Miller says, according to the article. But, they are “a wonderful add-on because they provide valuable skills and can offer great peace of mind.”

Read the full article from CNBC.

Morningstar says its research shows that the value of the Financial Advisor role is currently misunderstood. To help, Morningstar published an article listing three things Financial Advisors can do to help show the value they bring to their clients.

Here are the key topics Morningstar suggests discussing:

1. Personalized goals-based planning. Implementing such a strategy “can increase a client’s wealth by more than 15%,” according to Morningstar. Many investors likely do not realize this. “Given the effectiveness of personalized advice, advisors should not take for granted that investors are committed to a goals-based strategy,” according to Morningstar.
2. Behavioral coaching. The modern advisor helps clients weather market volatility and keeps them on track with their financial plan. “This service is both unique to in-person advisors and extremely effective at improving their clients’ performance. But unfortunately, it’s another attribute investors take for granted,” according to Morningstar. Advisors should begin introducing clients to the world of behavioral science to help them understand the value FAs provide. Morningstar suggested using this guide it created.
3. De-emphasize maximizing returns. While some clients may be stuck in the days when they only went to an advisor for stock tips of investment strategies, FAs may want to “clear up the misconception” that their only role is to maximize returns. One way to do that is to provide examples of when chasing returns actually worked against an investor’s goals. “For example, a client that is three years from retirement should focus on maintaining their wealth, not taking on risk to increase return,” Morningstar writes.

Read the full article from Morningstar.

Financial consequences of a divorce can last for decades. Yet, 95% of women going through a divorce do not use a financial advisor, according to a new study. So reports Forbes.

A lack of awareness is the main reason why. This presents financial advisors with an opportunity to stand out to this segment of the population and discuss the following valuable items:

• The Marital Home
• Fine Jewelry
• Heirlooms and Antiques
• Bank and Retirement Accounts
• College Savings Account

A financial advisor can help by giving a better understanding of their spending or expenses both before and after a divorce. Having an FA is especially beneficial for those women who have been completely reliant on their husbands for bills, insurance, financial management, and budgeting. Having an FA can also help uncover critical financial assets that are not completely out in the open.

Read the full article from Forbes.

In a recent study sponsored by investment research platform YCharts, nearly 64% of survey respondents said their advisors contact them 'infrequently' or 'very infrequent.' Among those individuals, 66% said more frequent conversations would improve their confidence in the investment professionals that they use. So reports Financial Advisor.

Sean Brown, YCharts CEO, maintains that the ongoing bull market has allowed advisors to get away with inadequate communications.

Read the full article from Financial Advisor.