Ultra-high-net-worth investors are decreasing their exposure to the U.S. stock market by allocating more to alternative investments, according to the Institute for Private Investors' annual Family Performance Tracking survey.

Nearly half of respondents - who have at least $30 million in investable assets - reported that they plan to increase their allocation to commodities this year, and 45% of respondents to real estate. Nearly as many said they planned to increase their holdings in global equities, and 36% plan to decrease their cash holdings.

Wealthy Investors Bullish on Advisors, But Not Markets

Investors with at least $1 million in assets are confident in their advisors' ability to help them meet their goals, even though they are not bullish on the market overall, according to two new studies by Charles Schwab Advisor Services.

The first study, the 11th semiannual Independent Advisor Outlook Study, surveyed almost 900 RIAs representing $204billion in assets under management. It found that 45% of independent advisors are bullish about the market in the next six months. A second survey of 504 high-net-worth investors found that only 29% are bullish about the market. Nearly one-third of high-net-worth investors believe it will be difficult for their advisors to meet their goals in the current market, while 25% felt it will be easy.

"What we are seeing is confidence is returning," says Bernie Clark, executive vice president and head of Schwab Advisor Services. He says he was happy to discover in the new high-net-worth survey - 96% composed of investors who are not Schwab customers - that clients have more confidence in their advisors than in the markets.


Profitability has become a serious challenge for independent broker-dealer firms, according to a new survey by Cerulli Associates.

The research firm found the promise to advisors of "generous payouts, flexibility and high service levels" have forced many firms to make difficult decisions. "This will present challenges, but to grow their businesses moving forward, IBDs must look for opportunities to truly advance their advisors' practices, rather than trying to wrestle profit from their current model while allowing advisors to do whatever they feel is best or easiest for themselves in the short term," says Tyler Cloherty, senior analyst at Cerulli and co-author of the research.

One challenge is the revenue split between the firms and the advisors, and the explicit and implicit levels of service offered by the firms.

LPL Nabs $560M Team

LPL Financial has lured the Botsford Group, a regional advisory firm, to its wealth management platform. Comprised of seven wealth advisors with offices in Frisco, Texas; Atlanta, and Princeton, N.J.; the Botsford Group manages more than $560 million in client assets through both brokerage and advisory business.

The firm will provide access to fee-based services to clients as investment advisory representatives under the LPL Financial corporate RIA, and offer commission-based services through the LPL Financial broker-dealer structure. Botsford specializes in asset protection strategies, and manages clients' investing through its proprietary approach called Lifestyle Driven Investing.

Erin Botsford, CEO of the Botsford Group, has been named to Barron's Top 100 Women Financial Advisors in 2008, 2009 and 2010, and the Barron's Top 100 Independent Financial Advisors in 2008 and 2009. "We look forward to utilizing our industry-leading resources, scale and services to help drive the firm's ongoing growth and success," says Derek Bruton, managing director and national sales manager for LPL.


Mass-affluent Americans are planning to work longer, according to Bank of America's latest Merrill Edge Report, a semi-annual study that looks at the financial concerns of consumers with $50,000 to $250,000 in total household investable assets. The report found that more than half of that group, 57%, plans to push back retirement, up from 42% in January 2011. One in five say they plan to retire much later.

"While the economy is showing signs of a turnaround, our data indicates the outlook among the mass affluent is not quite as positive," Dean Athanasia, Bank of America's president of premier banking and investments, said in statement.


Advisors take note: More of your small business clients could face audits next year. The IRS is on a hiring spree, snapping up auditors who will inspect more returns, according to a prominent tax accountant who spoke at the spring forum of the Financial Planning Association of New York.

"With everybody losing jobs, the biggest hire is the taxing authorities. They are hiring left and right to do audits," says Mark Josephson, a partner at New York-based Murray & Josephson. "When I speak to an auditor, they say, 'Yeah, we just hired 31 people in our department, '" he says.

He added that as the IRS audits more taxpayers, including small business owners, the audits are taking longer because the agents are demanding more details. Josephson says that on audits he's seen recently, agents have demanded all relevant brokerage and bank statements.


Younger members of ultrawealthy households are grappling with relatives for a say in wealth planning, and women are concerned about how money affects their relationships, according to a new survey of 53 families with a net worth of $100 million or more.

One quarter of those age 30 to 39 said they are generally not satisfied with their families' investment decisions, and 43% of respondents in their thirties said they do not agree at all with their families' plans for wealth transfer. Only 14% of the group expressed strong satisfaction with the their respective families' wealth-transfer plans, compared with 84% of those age 40 to 49.

Women respondents identified different concerns. The study found that 79% of next-generation women were more concerned that their wealth would complicate their relations with spouses, partners, friends and colleagues, compared with 22% of men. Also, 50% of women worried about being targeted by unscrupulous people, and 43% of next-generation women worried about their wealth being mismanaged.


Love might be blind, or at least be able to overlook some financial woes, according to a survey concerning couples and money by TD Ameritrade.

Couples were asked if they would call off a wedding, push back the date or neither, if one partner announced a financial setback such as bankruptcy or unemployment. The largest portion of the respondents said they would do neither.

If a partner declared bankruptcy, 32% of respondents said they would cancel their wedding, 27% said they would hesitate or postpone, while 41% predicted they would do neither.

"We know that more people are getting married later in life, and, as a result, they are bringing more financial history into the marriage." said Carrie Braxdale, managing director of investor services at TD Ameritrade.


Far too many Americans are counting on Medicare to pay for an unrealistically high portion of their escalating health care costs in retirement, and too many people who have yet to retire are either ignoring or underestimating the advice they may be receiving from a financial advisor.

Those are the main takeaways from a Nationwide Financial survey of 1,250 Americans with more than $250,000 in household assets. Conducted by Harris Interactive, the survey found that 38% of those nearing retirement have not discussed their retirement plans at all with a financial advisor. Of those who have, only one in five discussed health care costs in retirement that will not be covered by Medicare.


Beverly Hills Wealth Management, a registered investment advisory firm serving high-net-worth individuals, families and businesses, launched BHWM Maestro, a cloud-based dashboard for RIAs.

The tools developed by the advising firm in collaboration with Intel software specialists allows RIAs and advisors to consolidate their operational, sales and compliance tools into one application that's accessible through cloud computing. Such tools usually are spread across a number of providers and networks.

According to the California-based RIA, firms with multiple advisors and staff members that use the new platform will no longer need to manage multiple credentials, views or devices. One identity will follow the advisor to each service and application, which could reduce costs and increasing operational efficiency.


Online marketing can help automate sales activities and turn prospects into clients, Kristin Harad, founder of Next10Clients, told attendees at NAPFA's national conference in May.

Harad said that when prospects come to a website, very few are ready to buy anything. That means advisors need to capture these visitors by embracing a "freemium" concept, in which they offer free premiums such as reports, e-books and recorded speeches.

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