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.

Warren Buffett is defending the $25 billion in shares his firm bought back, according to a recent article from The Wall Street Journal.

Buffet said the large buyback was done to enhance the intrinsic value for shareholders while still leaving plenty of money to pounce on opportunities. Berkshire Hathaway has $138.3 billion in cash and short-term Treasury bonds available, as of the fourth quarter.

However, Buffett did take a shot at other CEOs buying back stock. “American CEOs have an embarrassing record of devoting more company funds to repurchases when prices have risen than when they have tanked,” he wrote.

Read the full article from The Wall Street Journal.

JPMorgan strategists are calling Bitcoin an “economic sideshow” while positing the true post-COVID-19 narrative is the “rise in digital finance.” So reports Seeking Alpha.

The analysists also argue that competition between fintechs and banks is going to pick up steam as Big Tech continues to play a role as a potent digital platform for customer data access. “The report points out that financial innovation is outpacing regulation, creating an uneven playing field, benefiting fintechs as it’s easier and cheaper for them to offer similar products and services,” according to the article.

Read the full article from Seeking Alpha.

2020 was a memorable year for many Bitcoin investors. However, Sean Williams of The Motley Fool, says these three “high-powered growth stocks” are poised to leave Bitcoin in the dust in 2021.

• Sea Limited (NYSE: SE): this Singapore-based company has seen its shares quintuple in the last year, but Williams say it is just getting started. Williams points to Shopee, Sea’s online shopping platform. He also noted Sea’s financial services sector.
• Jushi Holdings (OTC: JUSHF): this is marijuana stock has a strategy that allows it to build up its brand with minimal competition. Williams also points out that the Jushi execs have a lot of skin in the game.
• Fastly (NYSE: FSLY): this edge cloud services provider helps speed up and secure “the process by which content reaches end users.” Williams says that despite it being up 422% last year, as of publication of the article, it “looks to be in the very early stages of its growth.”

Learn more about these stocks and Williams’ thoughts by reading the full article from The Motley Fool. Williams has no position in any stocks or cryptocurrencies mention in this article. The Motley Fool, however, does own shares in all three stocks and recommends them. It does not own any cryptocurrencies mentioned.

E*TRADE Financial announced results from the most recent wave of StreetWise, its quarterly tracking study of experienced investors. In this study, respondents reflected on their 2020 investing decisions.

Highlights of the survey include:

• The vast majority are satisfied with their portfolio management. Interestingly, 71% of investors are satisfied with how they managed their investments this year.
• Most investors are steadfast in their long-term plan. In 2020, the top financial lesson investors learned was to stay the course (50%). This was distantly followed by focusing on strategic market moves (19%) and saving for an emergency fund (15%).
• Digital tools and human advice are not either/or. As the year comes to a close, the number one move self-directed investors plan to make is to use an online tool to review their portfolio (38%), followed by reaching out to an advisor (35%). Further, investors’ top financial resolution for 2021 is to use online tools to diversify their portfolio and help meet goals (33%), followed by seeking the help of an investment professional (30%).

“The year kicked off with a market shock that may define a generation in COVID-19, and as a nation we then experienced a social movement of monumental proportions in the fight for equality, only to cap the year with the most contentious election in modern history,” said Mike Loewengart, Managing Director of Investment Strategy at E*TRADE Financial. “And these next few months may continue to see pronounced volatility as markets balance winter virus woes with vaccine developments. In spite all of this, it’s encouraging to see investors tune out the noise and remain focused on long-term investment goals.”

Read the full press release from E*TRADE Financial.

Wells Fargo said it plans to bring employees back to its offices in September. So reports Bloomberg.

In a memo from CEO Charlie Scharf and COO Scott Powell, the duo said they will follow the science and are “encouraged by the significant increase in vaccination availability and have started to plan for a return to a more normal operating model in September, soon after the Labor Day holiday in the U.S.”

For its part, JP Morgan Chase is planning to send hundreds of interns back to its New York and London offices in the upcoming months, while Citigroup will be bringing more workers to its offices in July. Goldman Sachs also plans to have its summer interns work in its physical office locations.

Read the full article from Bloomberg.

Charles Schwab said it “inadvertently” transferred $1.2 million to the Kelyn Spadoni’s Fidelity account and now the former client is avoiding its calls. So reports Advisor Hub.

In a lawsuit, Schwab claims Spadoni has “taken steps to prevent Schwab from recovering the funds.” Schwab is also seeking an emergency order to prevent Spadoni from spending the money.

Spadoni, who opened a Schwab One account in January, closed it a month later. Schwab says when it tried to transfer her balance—$82.56—it actually sent an extra $1,205,536.84. Schwab attributed the mistake to “an issue created by a software enhancement.”

Schwab is not suing Fidelity over the incident.

Read the full article from Advisor Hub.

Zachary Rehl was charged with six counts related to the January 6 attack on the U.S. Capitol, including conspiracy “(1) to stop, delay, or hinder Congress’s enforcement certification of the Electoral College vote, and (2) to obstruct and interfere with law officers engaged in their official duties to protect the Capitol and its occupants from those who had unlawfully advanced onto Capitol grounds. So reports Think Advisor.

Rehl, the president of the Philadelphia Proud Boys, a white nationalist group, briefly worked as a Merrill Lynch broker in a New Jersey call center in 2019. Merrill declined to comment to Think Advisor.

Other known rioters with ties to the financial services industry include Klete Derik Keller, formerly of Cantor Fitzgerald, and former broker Christopher Stanton Georgia, who killed himself shortly after being arrested.

Read the full article from Think Advisor.

One financial advisor thinks so, according to a recent report from WJBC. The $1.9 trillion American Rescue Plan was passed recently by Congress.

John Rudi, a Financial Advisor with Savant Wealth Management says “this is a bailout; make no mistake about it.” He says it is “disguised as a COVID relief plan because that was the way to get it passed. I’m not happy with it; I think it’s way too much money.”

Many on the republican side of the aisle claim the relief bill is a “blue state bailout,” while Democrats point to the funding for schools, restaurants, vaccine distribution, and direct aid to many families.

The Gazette examined whether the relief plan is indeed a “blue state bailout.” Read the full article here.

Integrated Wealth Concepts LLC in Waltham, MA, Mutual Advisors, LLC in Casper, WY and Oakmont Corporation in Los Angeles, CA are the top three fastest growing financial advisors, according to a new ranking by from the Investment Advisor Association and National Regulatory Services. So reports Yahoo! Finance.

The rankings were part of the organizations’ top 50 rankings. The report also found that younger firms are among some of the fastest growing, with six of the top 10 firms on the list having been founded in the last decade.

The report also found that growth is slower in the South, with just four firms overall on the list, and none in the top ten, from the South. The highest ranking firm from the South is Heritage Wealth Advisors in Richmond, Virginia, which ranking 19th on the list.

Read the top 50 rankings and the full article from Yahoo! Finance.

Canterbury Investment Management conducted a survey of financial professionals about the challenges they face heading into the year. Ninety-five advisors participated in the survey. So reports ETF Trends. 

Canterbury discussed one of the biggest challenges with Brent Slinkard: building a process for getting a steady stream of qualified prospects. Slinkard is a consultant to independent financial advisors. Slinkard says that everyone wants such a pipeline, but there is “no magic formula.”

“Generating quality leads requires a systematic process over time,” he says. “If you look through the optics of an investor, it is about communicating properly, informing, educating, and nurturing over time to a point where you can ultimately convert that prospect to a quality client… I assert that it is absolutely based on a systemic process that allows you to nurture leads over time and bring them in, in an intelligent way to your advisory.

Tom Hardin, Chief Investment Officer at Canterbury Investment Management, notes that when trying to retain and nurture clients “one of the biggest mistakes that advisors make is scheduling these quarterly or semi-annual meetings where they take this performance monitor, and they compare the performance of their portfolio to either an index or combination of benchmark indexes.”

He says that approach puts the client in the "left brain" where they begin to worry about the comparisons. They may even question the process if the performance lags an index in a quarter. Hardin says he focuses on the “right brain” and teaches concepts that reinforce the process.

“I want them to begin to connect me and my expertise to their dreams and their goals and make the connection that I can help them get there,” he says
Read the full conversation from ETF Trends.

David Solomon, the CEO of Goldman Sachs does not think working from home is here to stay. So reports CNBC.

Specifically, despite a number of Goldman’s employees working from home during the pandemic, Solomon said working from home is an “aberration” that “we’re going to correct as quickly as possible.” He made his comments while speaking at Credit Suisse’s annual financial services forum.

“I do think for a business like ours which is an innovative, collaborative apprenticeship culture, this is not ideal for us and it’s not a new normal,” Solomon said, according to CNBC.

Read the full article from CNBC.

This past year ushered in some changes that are likely to stick around. In fact, 60% of advisors say they plan to, or may consider, a permanent virtual/in-office hybrid arrangement for their teams, according to a new survey of 396 financial advisors by InCapital.

More than half (55%) felt their teams were, or might be, more productive working from home. They noted several key benefits of working from home:

• 65% of advisors said they had time to increase communications with clients
• 49% spent time improving how they serve clients
• 30% said they will be or are considering reducing the size of their office space
• 16% said they may eliminate office space altogether

Back to the Office

Just shy of half (42%) returned to their offices as of December 2020, while 34% expect to return in the first half of 2021. Meanwhile, 11% plan to return in the back half of the year and 13% do not expect to return at all this year.

Half of the advisors surveyed said they are waiting until the second half of 2021 or later to meet clients in person. Only 12% of advisors said they have in-person meetings with clients now, and 38% said they would in the first half of 2021.

Most (67%) said they are not concerned about how clients and prospects react to them working from home. In terms of prospecting, the vast majority (96%) said they were comfortable meeting with prospects virtually; and 67% said prospecting and selling could be done effectively via virtual meetings. In fact, 45% of advisors said they had six or more virtual prospecting meetings in 2020 with a success rate of 22%.

For more survey results, read the full press release.