THE MEGA RIA
Is there room for a financial advisory firm with 150 elite RIAs and more than $50 billion in assets under management? Dynasty Financial Partners thinks so, and is betting that the stream of brokers leaving wirehouse firms will buoy its recruitment and growth. It also hopes to lure advisors with strong investment products in the capital markets, alternative investments, institutional-quality research and insurance and trust services. Plans call for recruiting advisor teams and individuals with more than $300 million in assets under management. To help pull this off, in April the company hired Loren Morris as its partner and director of RIA Services. Morris was previously the national head of the consolidator segment for Schwab Advisor Services' strategic development group.
In April, U.S. lawmakers moved forward on two efforts to overhaul the tax code, which some say could endanger the tax exemption for municipal bonds if they are passed. Sens. Ron Wyden (D-Ore.) and Dan Coats (R-Ind.) introduced a bill that would eliminate tax-exempt interest for new state and local debt in favor of tax-credit bonds, which are taxable, according to The Bond Buyer. In the House, Budget Committee Chairman Paul Ryan (R-Wis.) proposed a fiscal 2012 budget resolution that lowers federal income tax rates. By itself, the language does not suggest eliminating the tax-exempt status for municipal bonds, but it does follow proposals laid out last year by the National Commission on Fiscal Responsibility and Reform, a bipartisan group created by President Obama. The commission has suggested eliminating the tax-exempt status of munis, among other tax changes.
Trouble in Paradise?
Russell Investments found that bullishness for both emerging and developed markets fell markedly among U.S. investment managers. In its April Investment Manager Outlook survey, 51% of respondents said they were enthusiastic about emerging markets, down from 71% in December. "Investment managers have favored emerging-market equities for some time, but many believe the strong run may soon be over and the time for profit-taking is now," says Rachel Carroll, client portfolio manager at Russell. Managers are especially wary of the unrest in the Middle East and the impact of food price inflation on emerging economies.