News

The Murky Outlook for Bonds

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4.5

Andrew R. Michaud

• January 26, 2024

The bond market is facing uncertain times this year. Despite markets already factoring in multiple interest-rate cuts by the Federal Reserve, the economy has recently outperformed expectations. As a result, bond prices could potentially decline if the Fed decides to scale back its rate-hike plans.

Advisor Big Q: Recommendations for Fixed-Income Portfolios

To navigate this challenging environment, we sought the advice of financial advisors on what they are recommending for fixed-income portfolios. Their suggestions include:

1. Corporate Bonds
2. Fixed-to-Floating Rate Preferreds
3. Emerging Market Government Bonds

Custody Competition Heats Up

Competition in the RIA custody business, which involves safeguarding assets for registered investment advisor firms and providing related technology, is intensifying. While a few prominent players currently dominate the market, the landscape is shifting with new entrants such as Goldman Sachs, Altruist, Interactive Brokers, and Betterment. This expanding choice of service providers is beneficial for independent financial advisors who rely on these essential services.

Patti Brennan's Secret to Success

Discover the secrets behind the success of Patti Brennan, a renowned advisor who has earned a spot in the Hall of Fame. A primary focus on client retention has allowed her to build a thriving practice worth $2 billion. Brennan's team places great emphasis on establishing strong relationships with the adult children of their clients. In an exclusive Q&A session, she shares insights into her transition from nursing to wealth management, the journey of building an independent firm, and her commitment to organic growth rather than through acquisitions.

Dialing back on cash.

Investors fell in love with money-market funds and other cash-like investments when short-term yields rose to 5%. Now that the Federal Reserve is expected to start cutting rates this year, advisors need to steer some of that cash into longer-duration fixed-income vehicles, says John Nersesian, Pimco’s head of advisor education.

The Way Forward

In The Way Forward podcast, John Nersesian discusses how advisors can ensure their clients hold an appropriate amount of cash and why implementing a bond ladder could be a valuable strategy.

Mariner hit with lawsuits.

Mariner Wealth Advisors has rapidly grown as a Registered Investment Advisor (RIA) by acquiring other firms and recruiting competitors' advisors. However, the company is now facing legal action from three rival firms who accuse Mariner of using unethical tactics, such as misappropriating proprietary data, in order to poach their clients.

Wells Fargo’s recruiting strategy.

Barry Simmons, head of national sales at Wells Fargo, attributes their success in attracting new financial professionals to the flexibility offered by their three advisor channels. These channels include the retail bank, the traditional brokerage unit, and the independent broker-dealer FiNet. Simmons emphasizes that advisors have the freedom to start in one channel and then switch to another, a message that has resonated well within the industry and resulted in an increase in Wells Fargo's advisor headcount across all three channels.