Gaining Perspective

My guest today will discuss how he works with UHNW/HNW individuals and families when it comes to charitable giving and meeting philanthropic needs. We will talk about the issues individuals should consider when making a gift of a business interest to a public charity. We will discuss the benefits for donors in making the decision to give a gift of a business interest to a public charity, the types of business interests that a donor may give to charity and the trends he’s seeing across his client base when it comes to charitable giving strategies such as this one.

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Here is a link to BNY Mellon WM’s piece, Considerations in Making a Gift of a Business Interest to a Public Charity.

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Clients often assume that their need for life insurance ends when they stop working. In fact, whole life insurance can play an important role in your client’s retirement income strategy. For higher income earners, a whole life policy may also be an effective way to help protect income and accumulate additional funds for retirement. Here to discuss the role whole life insurance can play in your clients’ retirement strategies is Neil Drzewiecki.

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Here is a link to the MassMutual web site.

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Disclaimers to include in show notes:

The decision to purchase life insurance should be based on long-term financial goals and the need for a death benefit. Life insurance is not an appropriate vehicle for short-term savings or short-term investment strategies. While the policy allows for loans, you should know that there may be little to no cash value available for loans in the policy’s early years.

The information provided is not written or intended as specific tax or legal advice. MassMutual®, its subsidiaries, employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

*Distributions under the policy (including cash dividends and partial/full surrenders) are not subject to taxation up to the amount paid into the policy (cost basis). If the policy is a Modified Endowment Contract, policy loans and/or distributions are taxable to the extent of gain and are subject to a 10% tax penalty if the policyowner is under age 59½. Access to cash values through borrowing or partial surrenders will reduce the policy’s cash value and death benefit, increase the chance the policy will lapse, and may result in a tax liability if the policy terminates before the death of the insured.

The products and/or certain features may not be available in all states. State variations will apply. Whole Life Legacy series policies ((Policy Forms: MMWL-2018 and ICC18-MMWL in certain states, including North Carolina)/ (MMWLA-2018 and ICC18-MMWLA in certain states, including North Carolina)) and MassMutual Whole Life series policies on the digital platform (Policy Forms: WL-2018 and ICC18WL in certain states, including North Carolina) are level-premium, participating, permanent life insurance policies issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001.

FOR FINANCIAL PROFESSIONAL USE. NOT FOR USE WITH THE PUBLIC.

The fixed income market is on the verge of having its worst year of performance in several decades, and for many of us, the worst of our careers – but there are still fixed income opportunities for investors to consider.

In our discussion, we want to share with you insight on a segment of the fixed income market that we believe presents an opportunity for investors – municipal bonds.

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Here is a link to the MFS site.

Here are more links to find out about MFS and Fixed Income:

• Fall Fixed Income
• What's Up With State and Local Tax Receipts?
• US Taxable Municipal Bonds - Time to Consider a Strategic Allocation
• Fixed Income Insights

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Among financial advisors, 57% have reported spending a significant portion of their time discussing non-financial topics with clients. To retain clients, advisors need to provide a more connected and emotional financial experience to help clients achieve and sustain financial freedom. The role of an advisor is changing, and advisors should use technology for the more technical aspects of the job, to focus on the emotional, human-to-human connections. As advisors’ roles evolve, they face ongoing challenges of capacity and scale. To respond, they must be intentional about how they use their time, where they invest, and the new skills they develop. My guests will delve into this topic, and why it requires the right infrastructure to maintain capacity, and how advisors can use specialization, partnership, technology, and operations to gain capacity and grow.

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Links to resources about SEI and its advisor offering

• About SEI’s Advisor Business: https://www.seic.com/rias-independent-advisors/overview
• Link to Growth Lab: https://info.seic.com/welcome-to-the-sei-growth-lab
• Link to Scale with Technology toolkit: https://info.seic.com/scalewithtech
• Link to Scale with Operations toolkit: https://info.seic.com/growth-lab-scale-with-operations

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The advisors who are listening to this podcast will start a financial-planning process with a risk assessment for a client.  That exercise will evaluate how much volatility the client can tolerate. It will serve as input to constructing a portfolio that optimizes returns given a client’s risk tolerance.

My guest today is here to explain why that is the wrong approach.  The problem is not to minimize volatility, he says, but to figure out how money a client needs, when they need it, and to solve for that problem.

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Here is a link to the Nebo site.

a. Investing for Retirement III: Understanding and Dealing with Sequence Risk Sequence of return risk is entirely ignored in much of academic finance. But it is a meaningful risk for the vast majority of investment portfolios and there are useful tools that can mitigate its effects. We believe a portfolio construction framework that takes into account the lifespan of the portfolio and its expected cashflows can account for sequence of return risk better than any standard single-period optimization. And by dynamically reallocating portfolios, portfolio managers can substantially further improve outcomes for their clients

b. Investing for Retirement II: Modeling Your Assets Standard financial industry practice builds retirement portfolios using mean-variance optimization and validates them using Monte Carlo simulations that assume asset returns are a random walk. The unsurprising result of a process stuck over 50 years in the past is portfolios that burden future retirees with an unnecessarily high risk of financial ruin.

We believe an approach to retirement investing that better models and understands the ways in which financial markets differ from the outdated academic assumptions of market efficiency and random walks will result in substantially superior portfolios.

c. Investing for Retirement: The Defined Contribution Challenge The retirement landscape has changed. The risk of failure with the traditional glide paths and savings/spending assumptions seems to us to be disturbingly high.

To address this shortcoming, we introduce a framework based on a common-sense definition of risk: not having enough wealth in retirement. The goal is not to put investors into yachts, but rather to increase the odds that they have the appropriate level of resources in retirement. We show that dynamic asset allocation – moving your assets – is an essential part of achieving retirement goals.

Note: this was one of the most downloaded papers on Advisor Perspectives in 2014.

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In September, WisdomTree announced its first blockchain-enabled fund, The WisdomTree Short-Term Treasury Digital Fund (WTSY). The fund brings a mainstream, traditional asset, U.S. Treasury bonds, into the digital ecosystem to unlock use cases and distribution opportunities.

Jarrett Lilien, president and COO of WisdomTree, is here to discuss the “why” behind this fund and what it means as traditional asset management moves to the blockchain. We will also discuss:

• The company's upcoming blockchain-native app, WisdomTree Primel
• The company’s strategy on crypto and blockchain enabled finance; and
• And why Jarret believes the future of the asset management industry is in blockchain-enabled finance.

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Here are some links to learn more about WisdomTree:

• WTSY: The Digital Fund Opportunity blog post
• WisdomTree Prime waitlist
• My previous podcast with Jarrett

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Fear and uncertainty in financial markets driven by inflation-fighting central banks, slowing economic growth and geopolitical tensions has driven risk-off investor behavior. While this can be disorienting, the U.S. Value team at Artisan Partners, led by portfolio manager Daniel Kane, views the current market drawdown as a healthy readjustment to the cost of capital. This comes after years of central bank interventions that distorted asset prices and provided a tailwind for growth stocks. It drove less selective managers to pay higher price multiples. He will explain why today’s shifting financial landscape will create more attractive investment opportunities, particularly for disciplined value investors.

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Here is a link to the Artisan Partners web site, and here is a link for more information about the Artisan Value Income fund.

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There are continuing pressures on investment portfolios as advisors and their clients need to manage pressures they have not seen for 20 years: market volatility, inflation, rising interest rates and a potentially rising tax rate environment. Some of these pressures have not surfaced in 20 years. With fixed income not holding up as a low-risk part of the portfolio, right now is an opportune time to look at other strategies to protect client portfolios.

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Here is a link to the Equitable website

Here is the Equitable Annuities link

Here is a link to the previous Gaining Perspective episode featuring Scanlon

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CAIS is a truly open marketplace for alternative investments, where financial advisors and asset managers can engage and transact directly on a massive scale. Advisors do not have the same access to alternative investments as large institutions. Without that access, advisors have fewer tools to capitalize on opportunities or withstand market downturns. This unlevel playing field puts financial advisors at a meaningful disadvantage when building and protecting wealth. CAIS is aiming to change that.

The right technology platform with the right integrations and support is critical to the success of an advisor's growth and client engagement. Each piece must be right, but it's the blending that drives the value. Understanding the advisor's needs and involving them in the decision process is vital to the success. This needs to be done at all levels of product development, from strategy and design, to testing, support and ongoing feedback. My guest today will explain how he has managed and navigated this process with one of the largest advisor networks, Commonwealth Financial.

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Click here to learn more about Commonwealth’s technology solutions.

Here is an article by Patrick: An Office Technology Blueprint for Financial Advisors.

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