Rick Wurster discusses the challenges advisors are facing. Joe Grogan talks about making investing simple. Kathy Jones explains the unprecedented year for bonds. Jalina Kerr provides details on products for Schwab's RIA clients.
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Quick takeaways
Investors are seeking simpler investment strategies that focus on quality investments and are easier to understand and manage.
Model portfolios are a popular choice for advisors as they offer scalability, efficiency, risk mitigation, and simplify the investment process for both advisors and clients.
The Schwab Impact Conference provides a platform for independent advisors to connect with peers and industry experts, reinforcing fiduciary responsibilities and addressing the need for streamlined digital processes.
Deep dives
Investment industry shifting towards simpler strategies
There is a growing demand for simpler investment strategies as investors seek to understand and manage their portfolios more easily. Complex products and derivative-based strategies are being replaced by traditional stock and bond portfolios that are easier to comprehend. This shift towards simplicity does not mean a loss of sophistication, but rather a focus on quality investments that can withstand market cycles.
Model portfolios gaining popularity among advisors
Model portfolios are scalable, efficient, and risk-mitigating investments that many advisors are using to manage their clients' portfolios. These portfolios offer diversification and are designed to withstand different market cycles. Advisors are using models that combine equities and bonds, including growth and value equities, to create portfolios that align with their clients' risk profiles. Model portfolios are becoming a popular choice as they simplify the investment process for both advisors and clients.
Schwab Impact Conference provides support for independent advisors
The Schwab Impact Conference serves as a homecoming for independent advisors, providing them with a platform to connect with peers and industry experts. This event focuses on reinforcing fiduciary responsibilities and supporting advisors in achieving their clients' financial goals. Schwab acts as a custodian for these advisors, offering operational and product support, as well as creating a safe and secure environment for their clients' assets. The conference also addresses the need for streamlined digital processes to help advisors run their practices more efficiently.
Shift in Investment Landscape: From Growth Funds to Ultra Short-Term Fixed Income
The investment landscape has undergone a significant shift from a focus on growth funds to ultra short-term fixed income. In a zero-interest-rate environment, investors became accustomed to high returns from growth funds. However, the tide has turned, and fixed income products such as cash and ultra short-term fixed income are now providing better returns. Investing in diverse ultra short-term fixed income or cash products has become crucial for balancing portfolios and avoiding negative returns. This shift has raised questions among investors who are seeking guidance on how to navigate the new investment landscape.
Challenges of Making Market Decisions and the Role of Research Departments
Investors and financial advisors face challenges in making market decisions due to their limited access to information and busy schedules. Research departments play a crucial role in providing guidance and analysis to help investors make informed decisions. At Wisdom Tree, a research department consisting of 30 individuals closely monitors the markets to understand how to place investors' funds into products that will stand the test of time. The research department's expertise and deep understanding of the market allow them to provide support to advisors and investors and help them navigate the ever-changing investment landscape.
Rick Wurster, President of Charles Schwab, talks about the challenges advisors are currently facing. Joe Grogan, Head of Distribution at WisdomTree, discusses making investing simple. Kathy Jones, Chief Fixed Income Strategist at Schwab Center for Financial Research, explains why it's been an unprecedented year for bonds. Jalina Kerr, Managing Director and Head of Client Experience for Schwab Advisor Services, provides details on the latest products and solutions for Schwab's RIA clients. And we Drive to the Close with Ben Kirby, Co-Head of Investments at Thornburg Investment Management. Hosts: Carol Massar and Tim Stenovec. Producer: Paul Brennan.
