Page 8 - Investment Advisor April/May 2022

EDITOR’S NOTE

By Janet Levaux

Complex Times, Approaches

s we go to press, it’s day 20 of Russia’s invasion of Wealthfront, says Welsh, has about $27 billion assets and
Ukraine. The sad situation is looking protracted, with 470,000 self-directed clients, and annual revenue of about $67
A several thousand soldiers and several hundred civil- million. For UBS, the aim is to attract the robo-advisor’s “afflu-
ians killed so far. Also, concerns are mounting that higher oil ent Gen Z and millennial” investors through Wealthfront’s
prices, sanctions and other factors could produce a recession digital platform.
in the U.S. and elsewhere. Get ready for “a torrent” of regulatory issues this year,
As they try to keep up with these rapidly changing develop- Washington Bureau Chief Melanie Waddell explains in this
ments, financial advisors may want to reconsider their view month’s The Playing Field column. As for FINRA, its priority
of life insurance. Rather than being is on compliance with Regulation
only seen as a product just for spe- “Being creative about fixed Best Interest.
cific business or estate-planning income investments is even Jim Lundy, who works for the
goals, advisors should note that law firm Faegre Drinker, says that
some actuaries today are compar- more important in a low- although Reg BI applies to bro-
ing the structure of life insurance ker-dealers, the SEC “is continu-
to a “Super Roth” to help protect interest-rate environment,” ing to scrutinize” the investment
clients from tax increases, accord- explains Michael Finke in advisory industry. “We’re seeing
ing to Michael Finke, the author of more and more examinations
this month’s cover story. this month’s cover story. with alleged violations of Section
“Being creative about fixed 206 — the statute that applies the
income investments is even more important in a low-interest- fiduciary standard,” he adds.
rate environment, particularly when reaching for higher yields In this month’s The Fast Track column, Angie Herbers —
by investing in longer-term bonds or taking greater credit head of Herbers & Company — drills down into the need
risk — which is fraught with the potential for a loss if interest for targeted development of staff. “An advisor might be
rates rise or the economy contracts,” explains Finke, the Frank great at retirement planning but uncertain when it comes
M. Engle Chair of Economic Security at the American College to advanced issues in estate planning or tax planning, for
of Financial Services and leader of the Wealth Management example,” she explains.
Certified Professional designation program. He offers an in- Herbers emphasizes that “creating a culture in which new
depth look at this strategy and how advisors can generate “tax advisors can learn from one another is invaluable.” At a time
alpha” by allocating fixed income and other tax-inefficient when “thousands of unhappy young advisors have left their
investment strategies within a life insurance wrapper. jobs, leadership style and firm values can be a big advantage in
In other areas of the business, Tim Welsh of Nexus Strategy retaining your talent,” she points out.
looks at the “head-turning acquisition of the original robo-
advisor Wealthfront” by UBS in this month’s Industry Insights
column. He sees the $1.4 billion deal as one that Wealthfront
and its venture-capital backers “couldn’t resist.”
GROUP EDITOR-IN-CHIEF

6 INVESTMENT ADVISOR APRIL/MAY 2022 | ThinkAdvisor.com