What you missed in wealth management: March 26 to April 2

April 1, 2021 7:53 PM

This week, Captrust announced record new assets in 2020, Avantax bought fintech GuideVine Technologies, and Morningstar found that portfolio diversification paid off for investors during last year's market drop.

Here's what else happened over the past week in wealth management.

In 2020, RIA consolidator Captrust brought in record new assets of $87.6 billion, notched a new high in revenue growth at 27% and ushered in 124 new shareholders through its acquisitions, the firm said. The five ex-Wells Fargo Advisors Financial Network advisors of Pacific Investment Consultants brought roughly $700 million in assets under management as the latest of 48 practices that have joined Captrust since 2006. In addition, Captrust promoted advisor Eddie Welch to managing principal for its wealth management group.

Tax-focused firm Avantax Wealth Management acquired a marketing and lead generation fintech named GuideVine Technologies for an undisclosed amount. With parent firm Blucora engaged in a proxy fight with an activist shareholder, Avantax says it will integrate the newly acquired firm’s software into its technology stack for advisors.

Bloomberg News

IBD recruiting trail: BMO Harris Financial Advisors completed its previously announced move to LPL Financial’s Institution Services arm, bringing 115 advisors and $15 billion in client assets; Raymond James Financial Services-affiliated practice Crux Wealth Advisors added a half dozen advisors managing more than $500 million with their prior firms. Advisor Group’s SagePoint Financial recruited advisor Lee Rosenblum’s solo practice from LPL, where he had managed $173 million in client assets. And Kestra Financial poached mother-daughter team Deborah and Nancy Trouw of Sante Fe, New Mexico-based Elevation Financial Group from Waddell & Reed, where they oversaw $75 million.

Arete Wealth, an independent broker-dealer with a specialty in alternative investments, has closed its acquisition of Center Street Securities, a fellow IBD with a similar niche, 112 advisors and $1.04 billion in client assets. The parties didn’t disclose the price.

Interview With Pershing Capital Executives Mark Tibergien, Ben Harrison, And Gabriel Garcia Bloomberg News 040121

Chris Goodney/Bloomberg News

Ben Harrison, the head of advisor solutions at BNY Mellon’s Pershing, asks whether advisors are up to the challenge of meeting greater demand for financial advice.

Can state-run IRAs help America’s retirement problem? CFP Amie Agamata explains how they work.

Morningstar 3 data sets, smart beta, HSAs, investing, tax strategies, FINTECH, derivatives, client strategies, RIAs

Research firm Morningstar has scheduled the 2021 Morningstar Investment Conference for Sept. 22–24 in Chicago. In an email blast, the firm described the event as “a hybrid event that reflects our gradual steps into a post-pandemic world.”

One-size-fits-all strategies for retirement income don’t work. A new academic study explores how advisors can achieve greater buy-in and comfort from aging clients.

Bess Adler/Bloomberg News

Citigroup and BNY Mellon were part of a group of only five firms that received an “A” in a Racial and Gender Pay Scorecard released on Equal Pay Day by activist investors Arjuna Capital and Proxy Impact. The report rated firms on whether they disclose gender and racial pay gaps and the actions they have taken to close them. JP Morgan Chase, Bank of America and Wells Fargo each received a “B” grade. Metlife, Goldman Sachs, Citizens Financial Group and Lincoln Financial Group each got an “F.”

Did your clients suffer a COVID-related death in the family? Starting April 1, FEMA will take applications for funeral-expense reimbursements related to the pandemic, notes Redwood Financial Planning in Scotch Plains, New Jersey.

Coinbase Sued Over XRP Commissions After SEC Pursues Ripple -- Bloomberg 040121

Tiffany Hagler-Geard/Bloomberg News

Though investors are increasingly interested in cryptocurrency, there remain obstacles preventing advisors from helping them manage digital assets. Capitect, a performance reporting and client billing technology company, is hoping to solve a piece of the puzzle with a new integration with Coinbase, one of the largest cryptocurrency trading platforms. Capitect can now pull cryptocurrency holdings directly from Coinbase and display alongside other client accounts for portfolio management, reporting, rebalancing and billing.

Training and certification school The American College of Financial Services is teaming up with a financial literacy nonprofit called the Society for Financial Education and Professional Development to connect aspiring financial professionals with services and tools aimed at underrepresented communities. The college’s new Center for Economic Empowerment and Equality also launched a new website.

Morningstar’s new “2021 Diversification Landscape” report found that despite the pandemic-driven equity market drop of 34.5% from Feb. 19 through March 23, 2020, portfolio diversification buffered what would have been big losses. High-quality fixed-income holdings “held up well” over the period; cash and short-term Treasurys also maintained their value; and longer-term Treasurys posted gains. A traditional 60/40 portfolio would have lost 13 percentage points less than equity-only during the downturn, the research found.

Speaking of cryptocurrency, the Financial Planning Association partnered with the RIA Digital Assets Council, or RIADAC, on educational programs to boost planners’ competency in this growing asset class. According to research from RIADAC, 80% of advisors receive questions about cryptocurrency, but only 8% can adequately answer them. To correct, FPA members will receive a 50% discount on RIADAC’s certificate program, and RIADAC founder Ric Edelman will host sessions at FPA’s annual conference as well as contribute regular articles to the Journal of Financial Planning.

VanEck’s new green bond ETF appeals to the ESG investing trend.

Daniel Acker/Bloomberg News

Ethic, a digital asset management platform that uses direct indexing to allow advisors to customize portfolios according to a client’s ESG preferences, closed a $29 million round of funding led by Oak HC/FT and with participation from Fidelity Investments, an existing investor. The firm says it has increased assets 10x since 2019, when the company raised $13 million, with roughly $760 million in assets from 60 wealth advisory firms now on the platform.