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.

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.

Recent market volatility is drawing an awful lot of comparisons to the Great Recession. But, according to a recent USA Today article, the damage caused by the coronavirus won't likely be as deep or long-lasting as in 2007-08.

Gus Faucher, chief economist of PNC Financial Services Group, said a recession is not inevitable and that if there is one it is “likely to be brief and much less severe than the Great Recession."

One of the reasons for the difference is because the 2008 crisis was caused by significant underlying issues in the economy. The coronavirus outbreak, on the other hand, is an outside event that’s prompting the volatility. Some compare it to a “natural disaster.”

Once the outbreak is over, the economy’s major players should be poised for a comeback, according to the article.

For a deeper comparison between today and 2008, click here to read the full article from USA Today.

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.

On Monday, a spokesman for the Securities and Exchange Commission (SEC), said the agency is encouraging employees in its Washington, D.C. headquarters to work from home due to concern about the coronavirus outbreak. So reports Federal News Network.

“Late this [Monday] afternoon, the SEC was informed that a Washington, DC headquarters employee was treated for respiratory symptoms today,” the spokesman said, according to the publication. “The employee was informed by a physician that the employee may have the coronavirus and was referred for testing. Amongst other precautions, the SEC is encouraging headquarters employees to telework until further guidance.”

Many of the agency’s employees already participate in its telework program, which allows employees to work remotely at least part of the workweek. The SEC spokesman said the agency will continue to monitor “market function.”

Read the full article from the Federal News Network.

Washington state has had the most deaths from coronavirus in the U.S. and continues to be one of the hardest hit states. Financial advisors in the state are coping with a host of challenges, including calming investor fears to worrying about their own health and safety. So reports Financial Planning.

Michael Policar of HighTower Bellevue, who has isolated himself after experiencing cold-like symptoms, says clients want to know how long the outbreak will last and when they should “buy the dip.” His advice: stay the course and rebalance as needed. Advisors quoted in the article suggest proactively reaching out to clients about the current market volatility.

Firms are also cancelling events after Governor Jay Inslee declared a state of emergency late last month. HighTower nixed an executive services showcase in New Orleans “to keep everyone safe and healthy,” according to Abby Salameh, Chief Marketing Officer. The firm has its largest annual meeting set for Nashville next month, but is closely monitoring developments with the outbreak. Some firms that have not cancelled events are offering partial refunds and communicating “heightened levels of cleanliness and onsite accommodations.”

However, many firms did not want to discuss the outbreak with Financial Planning. “The topic clearly isn’t at the top of the list any advisor or firm would like to be addressing, given the disturbing potential for an exponential rise in cases and the substantial regulatory obligations relating to business continuity plans,” according to the publication.

Read the full article from Financial Planning.

While Hollywood often portrays financial advisors in a less than flattering light—and it can be easy to feel down about the profession—a recent ThinkAdvisor column says there are 17 reasons to feel proud about it.

A sampling of those reasons include:

• “You help people realize their dreams”
• “You help keep them from making stupid mistakes”
• "You are the voice of reason”
• “You help them retire with dignity”
• “You help solve life’s problems”
• “You share the pain”

Read the full article from ThinkAdvisor.

Morgan Stanley will acquire E*TRADE in an all-stock transaction valued at approximately $13 billion, the companies said in a press release.

Under the terms of the agreement, E*TRADE stockholders will receive 1.0432 Morgan Stanley shares for each E*TRADE share, which represents per share consideration of $58.74 based on the closing price of Morgan Stanley common stock on February 19, 2020. Morgan Stanley said the combination will significantly increase the scale and breadth of its Wealth Management franchise.

E*TRADE has over 5.2 million client accounts with over $360 billion of retail client assets, adding to Morgan Stanley’s existing 3 million client relationships and $2.7 trillion of client assets. Morgan Stanley’s full-service, advisor-driven model coupled with E*TRADE’s direct-to-consumer and digital capabilities, will allow the combined business to offer products and services to support the full spectrum of wealth.

James Gorman, Chairman and CEO of Morgan Stanley said Mike Pizzi, CEO of E*TRADE, will join Morgan Stanley, continuing to run the E*TRADE business within the Morgan Stanley franchise and lead the ongoing integration effort. He will report to Gorman and will join the Morgan Stanley Operating and Management Committees.

The acquisition is subject to customary closing conditions, including regulatory approvals and approval by E*TRADE shareholders, and is expected to close in the fourth quarter of 2020.

Read the full press release.

Amid panic and fear about the coronavirus pandemic and the correlated market fallout, advisors need to be the calm in the storm for their clients. That’s according to retirement experts interviewed by ThinkAdvisor.

Advisors need to communicate clearly to clients, noting that in most cases, the most prudent approach for investors is to simply stay the course when it comes to their retirement portfolios. They should talk to individuals about their goals and how those goals haven’t changed just because of the current crisis. And, remember, that clients are often emotional, worried about more than just their finances.

Some advisors have shown clients their performance over the last year, which they say, shows gains in most cases. When shown they still made money, despite all the doom and gloom, they become less stressed.

Cerulli Associates, for its part, says that when looking at the 2008 financial crisis, advisors who proactively reached out to clients were able to retain clients and even gain new ones.

Read the full article from ThinkAdvisor.

Artificial Intelligence, or AI, is not the enemy many financial advisors fear it is, according to Jack Brod, chair of the CFP Board of Directors. So reports Financial Advisor.

Rather than worrying they will be replaced by robo-advisors, or other forms of AI, financial advisors should be embracing it and incorporating it into their practice. It has the potential to handle much of the manual labor that financial advisors have to do.

“The introduction of AI in all industries, including financial services, is not something that is happening overnight,” Brod said, according to the publication. “It is evolutionary and is happening by degrees. Advisors will have time to understand and adapt to the new ways.”

Read the full article from Financial Advisor.

John Anderson, Managing Director of the Practice Management Solutions Team for Independent Advisor Solutions by SEI, said recently that in order to succeed in the next 5-10 years, advisors are going to have to find a niche rather than operate as generalists. So reports CNBC.

It will become increasingly difficult for lifestyle-type firms—or those with ten or fewer employers and managed by the founder—to compete with the large advisor firms or cheaper digital advisors. They will also face challenges associated with the ending of the longest economic expansion in history, and the transition of Baby Boomers from the accumulation phase to decumulation.

However, firms that develop a niche, like catering to the needs of millennial clients or widows, can distinguish themselves. Yet, many aren’t planning that far ahead.

Read the full article from CNBC.

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.