Week’s Best: Rethinking Fixed Income


It’s quarterly review season for advisors, which means many will need to explain to clients why the traditional safe haven of fixed income didn’t feel all that safe in the first quarter, as prices slumped and yields rose. With the Fed moving more aggressively to counter inflation, holders of existing bonds will continue to suffer, but it’s not time to throw in the towel on fixed income. Intriguing bond opportunities across the spectrum of time horizons could emerge, and advisors might start having discussions with clients about the trade-off between short-term dips in valuation and long-term yield increases.

In other most-read wealth management articles this week: 

ESG showdown. When you marry two of the hottest trends in the wealth management space—direct indexing and ESG investing—you get offerings like Schwab Personalized Indexing, which clients can use to track an ESG-focused fund, though the options to customize the individual holdings within a portfolio are limited. By contrast, rival Fidelity’s direct-indexing offering—Managed FidFolios—offers greater options for customization and highly detailed information on companies’ environmental impact, with a comparable fee and lower minimum investment.

Once you go Bitcoin, you don’t go back. Ask 10 advisors about their thoughts on clients investing in crypto and you’re liable to get 10 different answers, but a new survey from Nasdaq cut out all the naysayers by polling only advisors who are already in or planning to get into crypto. Respondents agreed that a 6% allocation of a client’s overall portfolio is about right, and 86% said that they plan to increase crypto investments over the next year, while none said they plan to cut down on their crypto holdings.

Vanguard teams with AmEx. Fund giant Vanguard has rolled out a new partnership with

American Express
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promoting a hybrid advice model—dubbed Invest for AmEx by Vanguard—that offers tiered access to human advisors and digital portfolio management. The co-branded service has a minimum investment of $10,000, though clients with more than $100,000 invested have unlimited access to Vanguard’s advisors. It carries a 0.5% annual fee, which is notably higher than the 0.3% Vanguard charges for its Personal Advisor Services hybrid offering.

Former Morgan Stanley advisor suspended. Finra has suspended and fined a former Morgan Stanley advisor for allegedly overstating the net worth of clients to place more of their holdings in non-investment-grade fixed-income securities in an attempt to skirt the firm’s rules on asset-allocation caps. Robert David is out of the brokerage sector for 20 months and consented to a $15,000 fine, according to a disciplinary report from the industry self-regulator.

Wiener’s firm buys big. Dan Wiener’s Adviser Investments doesn’t make acquisitions very often, but its latest buy—of California-based Polaris Wealth Advisory Group—was a big one, bringing the firm’s asset total to around $10 billion. More acquisitions could follow, as Newton, Mass.-based Adviser Investments is touting plans to build out its national footprint in part through “similar strategic combinations” where it is “actively looking to partner with teams that share our vision,” according to a company executive. 

For our weekly Barron’s Advisor Q&A, we checked in with Robert Phipps, director and portfolio manager at Per Stirling Capital Management. The veteran market maven says the Federal Reserve waited too long to tighten monetary policy, which means it likely will have to “slam on the brakes” in order to tame inflation. That increases the odds of a recession, says Phipps. But he also explains why a recession, if it does come, is likely to be mild.

Have a great weekend.

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