Monday morning briefing – January 28, 2019
The new technologies that European banks are prioritizing. The possible impact of an Amazon chequing account. The shift from passive to strategic beta and active. The practices FINRA will focus on in 2019. And much more in this week’s briefing.
Economic/industry news
International Economic Data Snapshot – includes aggregated data of the worldwide economy: Snapshot: International economic data
The Chinese economy grew 6.4% in the fourth quarter: China sees slowest economic growth since 1990
ECB maintains benchmark refinancing rate at 0%: ECB holds rates steady, guidance unchanged
BoJ holds interest rates steady: Bank of Japan keeps interest rates steady and cuts inflation forecast
Central banks may hold steady in early 2019: What to expect from central banks in 2019
U.S. recession in 2020 possible, according to Ray Dalio: Ray Dalio, founder of the world’s biggest hedge fund, sees a ‘significant risk’ of a possible US recession in 2020
The intertwining of impact investing and philanthropy: How impact investing can amplify philanthropic efforts
Some ESG trends you need to know: Five ESG trends to focus on for 2019
SG funds continue to attract large amounts of capital: Bucking the trend, flows into ESG funds set another record in 2018
Desjardins has launched the Desjardins Alt Long/Short Equity Market Neutral ETF: Desjardins introduces alternative ETF
CIBC launches CIBC Smart Investment Solutions: CIBC combines active and passive strategies in new portfolios
CI Investments launches ETF portfolios: CI introduces actively managed ETF portfolios
Fidelity introduces new ETFs to its lineup: Fidelity launches new factor ETFs, mutual funds
Happy Birthday, TFSA: The TFSA turns 10
On the pulse – New frontiers in fintech
How businesses can seize the opportunity in a fast-changing world: Navigating a world of disruption
How banking experts would launch their brand new bank: How banking providers can get their digital strategy right in 2019
Here are a few technologies that could impact financial services firms this year: Five emerging tech trends to watch in 2019
The asset management industry could benefit from regtech: How regtech will digitally transform asset management in 2019
The potential impact of an Amazon chequing account: An Amazon checking account could displace $100 billion in bank deposits (but it won’t)
Financial services firms should be prepared to enter the “greenfield”: Banks should take a page from fintechs on innovation
A look at some digital transformation myths: Busting five myths of digital transformation
Governments should provide a supportive environment for AI: Artificial intelligence initiatives need government support
How SMEs will benefit from fintech: Emerging fintech innovations set to influence SME lending in 2019
The government shutdown putting the country at risk of cyberattacks: With cybersecurity threats looming, the government shutdown is putting America at risk
Which new technologies European banks are prioritizing: Improving product agility is now a priority for 51% of European Banks, according to Temenos
A view from the inside on new technologies: The promises and pitfalls of new technologies
AI versus humans in the credit decision-making process: AI to outperform human credit decisions by 2024 – survey
IBM a number of health care insurance companies are looking to create a blockchain network for the health care industry: IBM teams up with healthcare firms for blockchain initiative
Understanding of blockchain lacking: New research points to poor understanding of blockchain amongst senior business execs
News and notes (U.S.)
The hedge fund industry experienced $35 billion in redemptions in 2018: 2018 was a challenging year for hedge funds, says eVestment
Center Lake Capital posted a 76% return in 2018: This hedge fund blew the doors off in 2018
Get to know Seth Klarman: Hedge fund billionaire Seth Klarman: The ‘most influential investor you’ve probably never heard of’
JP Morgan’s outlook on the alternative investment industry: JP Morgan’s 2019 Alternatives Outlook highlights opportunities across hedge funds, private equity, private credit, real estate and real assets
The potential drawbacks of the significant capital raises by private equity: The consequences of PE’s fundraising arms race
Natural resources attracting private capital: Private investment in natural resources hits record high
A look at some trends in the U.S. PE industry: More deals, fewer funds and other US PE trends in 9 charts
Shifting from passive to strategic beta and active: ETF providers pivot to strategic beta, active management
Outflows from long-term U.S. funds at its highest level since 2008: Investors showed major risk aversion in 2018
Government shutdown forces Cboe’s withdrawal of its bitcoin ETF application: Cboe’s bitcoin ETF application pulled after repeated SEC delays
Portfolios need to be more diversified, according to BlackRock: BlackRock: Advisors are overweight equities and ill prepared for 2019
Here is what practices FINRA will focus on in 2019: Finra to target online sales practices of broker-dealers
A deep dive into the pros and cons of a wealth tax: Opinion: How a wealth tax would work in the United States
High-net-worth topics
It is getting harder to attract capital from the high-net-worth: Fleeing clients are grim reality in banks’ push to manage wealth
The number of high-net-worth individuals globally expected to grow over the next five years: Global wealthy projected to grow 6.1% annually in next 5 years
The average age of the rich is dropping: Survey of U.S. investors finds the rich are getting younger
How the high-net-worth should handle a divorce: What Jeff and MacKenzie Bezos (and all high-net-worth couples) need to do to avoid a messy divorce
Polls & surveys – What financials are saying
IMF expects global economic growth of 3.5% in 2019 (IMF): IMF cuts world growth forecast to 3.5%
42% believe that the Canadian economy will worsen in 2019 (FPSC): 4 in 10 Canadians think the economy will be worse this year
Almost 75% of portfolio managers expect a recession (BCG): Portfolio managers believe recession is near
For financial marketing and investment commentary help, contact us at 1.844.243.1830 or info@ext-marketing.com.
Monday morning briefing – January 14, 2019
Bank and fintech partnerships took a big step forward in 2018. Expected trends for the hedge fund industry in 2019. How to improve the customer experience during digital onboarding. Here’s what matters to millionaires’ children. And much more in this week’s briefing.
Economic/industry news
International Economic Data Snapshot – includes aggregated data of the worldwide economy: Snapshot: International economic data
U.S. inflation rate falls to 1.9% in December: US consumer prices drop for the first time in nine months
The Bank of Canada maintains its benchmark rate at 1.75%: Bank of Canada holds steady as oil slump kills urgency for hike path
The U.S. Federal Reserve Board can take its time with future rate increases: Fed can be ‘patient and flexible’ with rate policy: Powell
Proposal on risk ratings for alternative investments: AIMA, CAIA propose new risk ratings for alternatives
Seeking more ESG fixed income solutions: Advisors say they want more ESG fixed-income options
Fitch to produce data showing how ESG factors affect a companies’ credit rating: Fitch Ratings launches ESG relevance scores to show impact of ESG on credit
RBC and BlackRock to partner in ETF offerings: RBC iShares is now Canada’s largest ETF provider
Regal Assets enters Canada: US alternative investment firm makes Canadian debut
Could ETFs cause systemic risks in a market downturn?: Bear market may increase risks in ETF sector
On the pulse – New frontiers in fintech
Bank and fintech partnerships took a big step forward in 2018: 2018: The year that banks and fintech started to figure things out
TD introduces Clari to its mobile app users: TD integrates chatbot into app
With the payments industry expected to grow, here is how AI can help: How will artificial intelligence ultimately benefit the financial services sector?
Revenues from robotic process automation in banking expected to grow by over 400% by 2023: Robotic process automation revenues in banking and financial services to reach $1.2bn by 2023
Financial services executives believe that big tech companies could enter the retail banking space: Two-thirds of financial decision-makers believe tech giants will offer retail banking in five years
Here is what could be in store for the payments industry in 2019: It’s all about convenience: the payments industry in 2019
The trends you need to know in wealthtech: Wealthtech trends to watch in 2019
The U.S. is falling behind in financial services technology: The US is losing the AI, blockchain & fintech arms race (but is crypto-friendly)
Understanding digital transformation: What is digital transformation in business: Everything you need to know
How to improve the customer experience during digital onboarding: Digital customer onboarding – are you doing it wrong?
Digital transformation slow for financial services firms: Digital transformation challenges firms: survey
Some cryptocurrency predictions for 2019: Crypto forecasts for 2019
News and notes (U.S.)
A look at the hedge fund industry in December: State of the industry – December, 2018
Hedge funds’ performance weak in December: Hedge funds down 0.82 per cent in December
A look at hedge fund winners & losers in 2018 (video): Hedge fund winners and losers in 2018
Expected trends for the hedge fund industry in 2019: Top hedge fund industry trends for 2019
Jeff Vinik to reopen hedge fund: Investing titan Jeff Vinik to reopen hedge fund: ‘The fire in my belly still burns’
Pershing Square starts 2019 strong: Ackman’s Pershing Square fund powers ahead in new year
Private equity year in review: 2018 in review: Top 5 global PE deals, exits & funds
Just over $130 billion was invested in VC deals in 2018: Venture capital investing soared to a record in 2018
Bitwise submits application for bitcoin ETF: Bitwise hopes to crack SEC code with proposed bitcoin ETF
U.S. money market funds gaining assets amid market volatility: U.S. money fund assets rise above $3 trillion for the first time since 2010
Predicting U.S. stock performance: The 30-year outlook for U.S. stocks
High-net-worth topics
Here is what is important to millionaires’ children: What the children of millionaires value most
Why a market-neutral strategy could work in the current market environment: Is it time to put your investments in neutral?
For the high-net-worth, consider these asset protection strategies: Asset protection of high net worth individuals
Polls & surveys – What financials are saying
Higher rates and volatile markets will affect Canadian’s wealth in 2019 (RBC): Expect wealth creation, homeownership challenges in 2019: RBC
Advisors should take some time to discuss bear markets with their clients (Hartford): Warning to advisors: Your clients don’t always listen to you
49% of Canadians do not have any emergency savings (Refresh Financial): 53% of Canadians live paycheque to paycheque
Women are worried about not having enough money for retirement expenses (HSBC): Women more worried about financial security in retirement than men: survey
For financial marketing and investment commentary help, contact us at 1.844.243.1830 or info@ext-marketing.com.
The rise of robo-advice. And what comes next.
The rise of robo-advisors is moving fast. The automation and algorithms behind it are advancing, all kinds of investors are using it, and more and more firms are launching their own platforms.
Simply put, robo is impacting the entire financial services industry in ways people never imagined.
To help get you oriented with robo’s wild journey so far, here’s a rundown of how it began, where it’s at now and where it will be soon.
Where robo-advice was – Humble beginnings
When the first robo-advisors launched back in 2008, they were generally limited to simple automated tasks, such as rebalancing assets in target-date funds. Because of the so-called lack of personalized service and human connection, many supposed robo’s basic role would continue.
But it would soon make major inroads. By the end of 2015, assets under management for robo-advisor platforms was at US$55-$60 billion.1
The general thinking around the growth of robo, however, was still low key. Many in the industry believed it could only serve the needs of tech-savvy millennials or those with little money to invest. In 2016, a Prudential Financial report found that only 17% of advisors believed robo-advice could help clients meet their financial-planning needs.2
Robo-advisors today – Prospects and adoption growing
Fast forward to now. That Prudential report found the same view among advisors changed dramatically in 2017, with 69% now believing robo-advice could meet financial-planning needs.2
Adoption of robo-advice has also grown considerably, with US$224 billion in AUM as at October 2017.3
“Adoption of robo-advice has also grown considerably, with US$224 billion in AUM as at October 2017.”
The typical profile of robo-advisor investors has changed in interesting ways too. Innovative fintech firms, such as True Link Financial, are even finding success among elderly investors by blending digital advice with over-the-phone service and prepaid debit cards.
What comes next for robo-advice – Beyond automation and ETFs
Looking forward, expectations for growth are high. A Business Insider report projects that robo-advisor AUM will hit US$1 trillion by 2020 and about US$4.6 trillion by 2022. While the North American market is expected to lead the way in the near term, Asia’s robo segment is expected to outperform by 2022.4
Yet, like any vastly growing space with new players hitting the scene, saturation of the market is inevitable. Robo’s strongest features – automated tax management, goals-based advice and exchange-traded fund (ETF) portfolio construction – are becoming basic commodities.
For financial firms to truly differentiate themselves, robo-advisors will have to do more than simply offer lower fees. The next leap forward – which is beginning to take shape among fintech firms – will be artificial intelligence (AI) and machine learning driving a more holistic robo solution that is specifically tailored to investors’ needs.
“The next leap forward – which is beginning to take shape among fintech firms – will be artificial intelligence (AI) and machine learning driving a more holistic robo solution that is specifically tailored to investors’ needs.”
In other words, robo’s future lies beyond automated portfolio management and low-cost ETFs. Making sustainable gains among all age groups, those with greater investable assets and, ultimately, the high-net-worth segment will come down to offering new, proprietary investment solutions that are not only cost-effective but can outperform, too.
For more insights into the future of financial services, contact us at 416.925.1700, 1.844.843.1830 or info@ext-marketing.com.
Sources:
1 Aite Research, Digital Wealth Management Market Update: A Mosaic of Models Emerges, March 2015
2 Prudential Assurance Company, Adviser Barometer report, Embracing opportunities in the adviser market, 2017
3 U.S. News & World Report, 9 Things to Know About Robo Advisors, 2017
4 Business Insider, The Evolution of Robo-Advising Report, 2017
The rise of robo-advice. And what comes next.
The rise of robo-advisors is moving fast. The automation and algorithms behind it are advancing, all kinds of investors are using it, and more and more firms are launching their own platforms.
Simply put, robo is impacting the entire financial services industry in ways people never imagined.
To help get you oriented with robo’s wild journey so far, here’s a rundown of how it began, where it’s at now and where it will be soon.
Where robo-advice was – Humble beginnings
When the first robo-advisors launched back in 2008, they were generally limited to simple automated tasks, such as rebalancing assets in target-date funds. Because of the so-called lack of personalized service and human connection, many supposed robo’s basic role would continue.
But it would soon make major inroads. By the end of 2015, assets under management for robo-advisor platforms was at US$55-$60 billion.1
The general thinking around the growth of robo, however, was still low key. Many in the industry believed it could only serve the needs of tech-savvy millennials or those with little money to invest. In 2016, a Prudential Financial report found that only 17% of advisors believed robo-advice could help clients meet their financial-planning needs.2
Robo-advisors today – Prospects and adoption growing
Fast forward to now. That Prudential report found the same view among advisors changed dramatically in 2017, with 69% now believing robo-advice could meet financial-planning needs.2
Adoption of robo-advice has also grown considerably, with US$224 billion in AUM as at October 2017.3
“Adoption of robo-advice has also grown considerably, with US$224 billion in AUM as at October 2017.”
The typical profile of robo-advisor investors has changed in interesting ways too. Among the 14 robo-advisors in Canada, the average age of a user today is around 44 years old.4
Innovative fintech firms, such as True Link Financial, are even finding success among elderly investors by blending digital advice with over-the-phone service and prepaid debit cards.
What comes next for robo-advice – Beyond automation and ETFs
Looking forward, expectations for growth are high. A Business Insider report projects that robo-advisor AUM will hit US$1 trillion by 2020 and about US$4.6 trillion by 2022. While the North American market is expected to lead the way in the near term, Asia’s robo segment is expected to outperform by 2022.5
Yet, like any vastly growing space with new players hitting the scene, saturation of the market is inevitable. Robo’s strongest features – automated tax management, goals-based advice and exchange-traded fund (ETF) portfolio construction – are becoming basic commodities.
For financial firms to truly differentiate themselves, robo-advisors will have to do more than simply offer lower fees. The next leap forward – which is beginning to take shape among fintech firms – will be artificial intelligence (AI) and machine learning driving a more holistic robo solution that is specifically tailored to investors’ needs.
“The next leap forward – which is beginning to take shape among fintech firms – will be artificial intelligence (AI) and machine learning driving a more holistic robo solution that is specifically tailored to investors’ needs.”
In other words, robo’s future lies beyond automated portfolio management and low-cost ETFs. Making sustainable gains among all age groups, those with greater investable assets and, ultimately, the high-net-worth segment will come down to offering new, proprietary investment solutions that are not only cost-effective but can outperform, too.
For more insights into the future of financial services, contact us at 416.925.1700, 1.844.843.1830 or info@ext-marketing.com.
Sources:
1 Aite Research, Digital Wealth Management Market Update: A Mosaic of Models Emerges, March 2015
2 Prudential Assurance Company, Adviser Barometer report, Embracing opportunities in the adviser market, 2017
3 U.S. News & World Report, 9 Things to Know About Robo Advisors, 2017
4 The Globe and Mail, Robo-advisers find popularity where few thought they would, 2017
5 Business Insider, The Evolution of Robo-Advising Report, 2017
Read more:
https://ext-marketing.com/commentaries-articles/using-plain-language-in-your-financial-writing/