Vanguard Cross Listed New ETFs in Mexico

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Vanguard has cross-listed three U.S.-domiciled funds on the Global Market of the Mexican Stock Exchange.

The U.S. domiciled ETFs are:

  • The Vanguard Mortgage-Backed Securities ETF (VMBS)
  • The Vanguard International Dividend Appreciation ETF (VIGI)
  • The Vanguard International High Dividend Yield ETF (VYMI)

The cross-listing of U.S. domiciled ETFs in Mexico provides a strong product foundation for Vanguard, and a cost-efficient method of serving the Mexican market. The addition of these three products brings the total number of Vanguard ETFs registered on the Mexican Stock Exchange to 65, which you can see in the attached document.

Vanguard’s Heinz Volquarts noted that the three funds they cross-listed are not registered with the Comisión Nacional del Sistema de Ahorro para el Retiro (CONSAR). therefore the Mexican Pension Funds (afores) are not yet allowed to invest in them.

US Retail Asset Growth has Managed to Outpace Institutional Asset Growth

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According to global research and consulting firm Cerulli Associates, retail asset growth has managed to outpace institutional asset growth on a one-, three-, five-, and ten-year basis, reaching more than $18 trillion as of year-end 2015.

“A low-yield environment and a rise in average life expectancy is making it difficult for defined benefit (DB) plans to achieve returns to fund liabilities,” explains Jennifer Muzerall, associate director at Cerulli. “In recent years, sponsors have offered lump sums or buyouts to reduce the number of participants in DB plans via pension risk transfers.”

Pension risk transfer options are one of several drivers bolstering retail asset growth since asset managers have begun to explore the delivery of a wider variety of products and strategies through retail intermediaries. “The growth of retail assets has also been driven by the convergence of institutional-like strategies in the retail marketplace, such as alternatives,” says Muzerall.

Cerulli recommends that firms should continue to invest in distribution professionals and educational programs to get advisors comfortable with using alternatives. “It is important to work with advisors to show them how using alternatives or increasing allocations may impact their investment portfolios,” explains Muzerall.

“Asset managers must build out robust key account teams to face off with members of investment research or due diligence teams,” states Muzerall. Top asset managers surveyed recognize a need to accommodate the increasing sophistication of buying groups emerging within the intermediary channels. “The institutional sales process is making its way into retail channels and asset managers are seeking out relationships with top registered investment advisors and due diligence groups from both broker/dealer (B/D) home offices and B/D mega teams,” says Muzerall.

Cerulli’s latest report, The State of U.S. Retail and Institutional Asset Management 2016: Business Planning for Growth Opportunities, provides a comprehensive overview of the aggregate U.S. asset management landscape, benefitting both U.S. asset managers and those seeking distribution opportunities in the U.S. It explores all distribution channels, client segments, and product vehicles, with a focus on the interaction between the retail and institutional marketplaces.
 

Dominique Carrel-Billiard Left Financière de l’Echiquier

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Dominique Carrel-Billiard has stepped down from his position of chief executive officer of French boutique La Financière de l’Echiquier according to French economic trade publication L’Agefi reported.

The publication stated that Carrel-Billiard has reached an agreement with Didier Le Menestrel, co-founder and chairman of La Financière de l’Echiquier, to leave the company, it is understood that he will be replaced and Le Menestrel will take over his responsibilities as chief executive officer.

Carrel-Billiard joined La Financière de l’Echiquier in 2014, previously he was CEO of AXA IM from 2006 to 2013. Prior to that, he was Senior Vice President Business Support and Development at AXA and Principal at McKinsey & Company. He started his career in 1987 as an Associate at Crédit Commercial de France.

Established in 1991, La Financière de l’Echiquier has around €7.5bn of assets under management.

$7.8 Trillion U.S. High-Net-Worth at Risk

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$7.8 Trillion U.S. High-Net-Worth at Risk
Foto: mulan . 7.800 millones de dólares de grandes patrimonios a riesgo

According to Cerulli Associates, high-net-worth (HNW) households control close to 35% of all investable assets in the U.S. marketplace. Advisors surveyed by Cerulli were asked about the depth of their relationships with the potential inheritors of their HNW clients’ assets. While responses about the relationships with spouses were encouraging, advisor relationships with younger generations of the family are a large concern.

“The notion of helping a family define and accomplish their aspirations without involving spouses is irrational,” says Donnie Ethier, associate director at Cerulli. “The thought of referring to spouses as ‘heirs’ is not a welcoming idea, but many practices may have to approach it in this manner due to the generally limited rapport with family members.”

The study U.S. High-Net-Worth and Ultra-High-Net-Worth Markets 2016: Understanding the Long-Term Impact of Wealth Transfer reveals that 67% of HNW households are led by investors age 60 or older. “Overlooking the children of these investors is ill-advised as most are not adolescents, but adults well into their 30s and older, with their own financial habits, philosophies, and possibly established advisor relationships,” explains Ethier. “How and where the younger generations manage assets or inheritances represents a pivotal transformation, as these wealth transfers will likely determine who the future leading firms and channels become.”

As the industry continues to evolve toward a more transparent, goals-based approach to investing, practices will need to adjust to the new expectations of clients by offering a collaborative advisory model with a broader range of products and services. “We believe that wirehouses and private banks will adapt, while registered investment advisors and multi-family offices stand to capitalize,” states Ethier.

FINRA Names Stephen M. Cutler to Board of Governors

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FINRA Names Stephen M. Cutler to Board of Governors
CC-BY-SA-2.0, FlickrFoto: Youtube. FINRA incorpora a Stephen M. Cutler a su Consejo

The Financial Industry Regulatory Authority (FINRA) has named a new Large-Firm Governor – Stephen M. Cutler, Vice Chairman of JPMorgan Chase & Co. – to its Board of Governors. Cutler was appointed to complete the term of former Governor Gregory Fleming, who resigned his board seat earlier this year.

Cutler joined JPMorgan asits General Counsel in 2007 from the law firm of WilmerHale in Washington, D.C., where he was a partner and co-chair of the firm’s Securities Department. Prior to that, he was the director of the U.S. Securities and Exchange Commission’s Enforcement Division. Before joining the SEC in 1999, he was a partner at Wilmer, Cutler & Pickering, where he worked for 11 years.

Cutler obtained his bachelor’s degree summa cum laude from Yale and his J.D. from Yale Law School, where he was an editor of the Yale Law Journal.

“Steve brings a valuable perspective and a keen understanding of securities regulation and the industry to FINRA’s Board,” said FINRA Chairman Jack Brennan. “We welcome Steve and look forward to working with him.” 

“FINRA will benefit from Steve’s depth of industry and regulatory knowledge in advancing our mission of protecting investors and ensuring the integrity of our markets,” said Robert Cook, FINRA’s President and Chief Executive Officer. “We are very fortunate to have Steve join the FINRA Board.”

FINRA is overseen by a Board of Governors, the majority of whom are public representatives. The 10 industry governors include three from large firms, one from medium-size firms, three from small firms, one floor member, one independent dealer/insurance affiliate and one investment company affiliate. FINRA’s CEO has the remaining seat. 

Over 60% of UK Wealth Managers Agree Automated Investments Services Can Complement Existing Offering

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The channels through which financial services are provided in the UK wealth market are undergoing a transformation. With an influx of new entrants offering digital platforms and robo-advice, traditional wealth managers are now responding to the rise in demand for automation, according to financial services research and insight firm Verdict Financial.

The company’s recent report, which analyses the UK wealth management space, indicates that traditional wealth managers are starting to embrace the ability to resonate with audiences on a digital level while still offering professional advice from a wealth manager or private banker.

Nicole Douglas, Analyst for Wealth Management at Verdict Financial, states: “According to our 2016 Global Wealth Managers Survey, 49.5% of wealth managers believe the demand they currently experience for automated investment services will increase in the next two years, indicating a noticeable proportion of the market prefers digital platforms in which to carry out investment decisions or seek advice.”

According to Douglas, automated services are becoming more prevalent in the UK market but do not pose an immediate threat for traditional wealth managers. She explains: “Advisors are not likely to be replaced by robots in the near future. Our data shows 87% of wealth managers disagree with the statement that traditional wealth managers will lose market share to automated investment services – or ‘robo-advisors’ – in the next 12 months.”

In short, there is still demand for having investments managed professionally. Verdict Financial’s data shows that lack of expertise and time are the two most common reasons wealth managers believe high net worth clients opt to have wealth professionally managed.

As such, wealth managers will do well to continue providing personalized advice and embrace digital capabilities as a supporting role. Douglas adds: “Our data shows that 67% of wealth managers agree with the statement that investing in automated investment services can complement their existing offering.”

Verdict Financial believes that investing in automated services will prove successful for competitors in the UK market, and wealth managers will come to experience that an offering with both human and automated components resonates with a range of investors.
 

Fundinfo goes live in Ireland and Portugal

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Fundinfo, a leading international provider of fund information, now publishes documents and data for funds available to investors in Ireland and Portugal. With this expansion, fundinfo serves 13 European countries plus Hong Kong and Singapore. The service connects fund houses, fund distributors and investors via an online, on-demand information platform.

Jan Giller, Head of Marketing and Sales at fundinfo said, “Since the founding of our fund platform in 2006, we have steadily expanded our coverage from serving just the Swiss market to covering all the main fund markets in Europe, plus Hong Kong and Singapore. We welcome fund distributors and investors in Ireland and Portugal and invite them to take advantage of the most comprehensive, accurate and up-to- date source of fund information available.”

The platform provides complete information about funds and ETFs from over 800 fund houses comprising over 25,000 funds and 180,000 share classes. Participating fund houses include most of the world’s largest asset management companies.

For investors, the service is free of charge, and does not even require a log-in. It provides the latest fund documents such as monthly and semi-annual reports, KIIDs, prospectus, legal announcements, plus the latest information about the fund, fees, NAV price, and analyst ratings. The service as well as fund documents are provided in multiple languages. Documents in local language are provided where available.

In addition to the platform, fundinfo also offers associated services such as automated document and data dissemination, direct document and data feeds for banks, fund distributors and financial publications, as well as web-based fund popularity analysis and fund selection tools.
 

It is Time to Rewrite the UK’s Fiscal Rules

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Standard Life Investments believes that it is time for a reset of fiscal policy to address both short and long-term challenges in the UK economy. A well-targeted stimulus would help cushion an expected slowdown in growth following the UK’s vote to leave the European Union. It would also provide ammunition to address the deterioration in growth rates seen over recent years, through targeted investment and structural reform. With markets concerned over the long-term effects of leaving the European Union, these priorities have become even more pertinent.

‘Time to rewrite the UK’s fiscal rulebook’ is the first in a series of Public Policy Perspectives, a new research publication which aims to broaden the debate on policy issues across a range of economies and make neutral, evidence-based recommendations. The paper argues that a coordinated fiscal and monetary stimulus would represent a much more effective policy mix than monetary easing alongside further fiscal austerity. The upcoming Autumn Statement provides an ideal opportunity for a step change. We would advocate:

A new fiscal framework which provides scope for a sustained loosening in policy and increased public investment through the business cycle. Under this new framework, the government should announce an immediate stimulus of 1.25% of GDP, with policy in subsequent years conditioned on the performance of the economy.

Action should be weighted towards an increase in infrastructure investment (0.75% of GDP) to be sustained over a number of years. This should be tilted towards smaller scale local transport projects, which provide the largest return.

Increased public investment should be complemented by progressive welfare spending to support consumption. Funding should also be earmarked for the ‘Sure Start’ and ‘Post 16 Skills’ programmes to help address the UK’s skills shortfall.

The Government should actively address inefficiencies in the tax system. In the short-term it should address capital allowances and establish a consistent tax system for the financial sector.

Longer-term priorities should include a shift in taxation away from property values/transactions towards land, and a tax allowance for corporate equity that reduces the bias towards debt financing.

A redoubling of efforts to increase housing supply through further planning reform and increased incentives for building.

‘Time to rewrite the UK’s fiscal rulebook’ is co-authored by James McCann, UK & European Economist, and Stephanie Kelly, Political Economist, Standard Life Investments.

James commented “Monetary policy has been overburdened since the financial crisis, with fiscal policy actually working against the recovery. A large fiscal push in the Autumn Statement would complement the easing measures implemented by the Bank of England over the summer. It would also help lift long-term growth rates, primarily through targeted infrastructure spending and structural reforms.”

To read the full document please click here.

Mary Jo White is Leaving the SEC

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La presidenta de la SEC, Mary Jo White, anuncia su salida al fin de la administración Obama
Photo: SEC. Mary Jo White is Leaving the SEC

SEC Chair Mary Jo White, after nearly four years as the agency’s head, today announced that she intends to leave at the end of the Obama Administration.  Under Chair White’s leadership, the Commission strengthened protections for investors and the markets through transformative rulemakings that addressed major issues highlighted by the financial crisis.  The Commission also instituted a new approach to enforcement that has resulted in greater accountability and record actions through, among other things, the use of admissions of wrongdoing and enhanced data analytics and technology.

Chair White, who became the 31st Chair of the SEC in April 2013, will be one of the SEC’s longest serving Chairs.

“It has been a tremendous honor to work alongside the incredibly talented and dedicated SEC staff members who do so much every day to protect investors and our markets,” said Chair White.  “I am very proud of our three consecutive years of record enforcement actions, dozens of fundamental reforms through our rulemakings that have strengthened investor protections and market stability, and that the job satisfaction of our phenomenal staff has climbed in each of the last three years.  I also want to express my appreciation for the engagement and dedication of my fellow Commissioners and my financial regulator colleagues, past and present.”

In addition to completing the vast majority of the agency’s mandates under the Dodd-Frank Act and all of its mandates under the JOBS Act, Chair White’s leadership has advanced the agency’s mission through other critical rulemakings and built robust and effective frameworks for the SEC’s regulatory regimes going forward.

“My duty has been to ensure that the Commission implemented strong investor and market protections, and to establish an enduring foundation for future progress in the most critical areas – asset management regulation, equity market structure and disclosure effectiveness,” said Chair White.  “Thanks to the hard work and dedication of the SEC’s staff, we have accomplished both.”

Chair White drove many important rules and other policy measures to completion.  Under her leadership, the Commission advanced more than 50 significant rulemaking initiatives, including:

  •     Fundamental reforms to the money market fund industry and unprecedented new disclosures and protections for mutual fund investors in a major initiative to strengthen regulation of the $67 trillion asset management industry
  •     Enhanced equity market structure oversight, including wide-ranging new controls on how key market participants handle technology and systems issues
  •     A comprehensive framework for enhancing the effectiveness of corporate disclosure for investors
  •     Extensive new safeguards for the financial system and for investors in the more than $7 trillion security-based swap market
  •     New ways for smaller companies to raise capital needed to grow their businesses
  •     New post-crisis restrictions on proprietary trading and investments by broker-dealers and other financial institutions through the Volcker rule
  •     Major enhancements to transparency and risk management for asset-backed securities, which were a significant contributor to the financial crisis
  •     Strong operating standards for the clearing agencies that stand at the center of our financial system
  •     Extensive reforms to the regulation of credit rating agencies and how they address conflicts of interest that can harm investors
  •     First-ever regulatory framework for municipal advisors who are critical to the capital raising activities of thousands of local governments
  •     Modernized rules of practice for conducting administrative proceedings, including providing expanded rights of discovery

To enhance accountability of those who violate the securities laws, Chair White implemented the Commission’s first-ever policy to require admissions of wrongdoing in certain cases where heightened accountability and acceptance of responsibility is appropriate.  Thus far, the Commission has required admissions from more than 70 defendants, including 44 entities and 29 individuals.

During Chair White’s tenure, the Commission brought more than 2,850 enforcement actions, more than any other three-year period in the Commission’s history, and obtained judgments and orders totaling more than $13.4 billion in monetary sanctions.  The Commission charged over 3,300 companies and over 2,700 individuals, including CEOs, CFOs, and other senior corporate officers.

The record number of enforcement actions over the last three fiscal years against companies and senior executives involved many “first of their kind” cases in asset management, market structure and public finance.  Other major cases involved insider and abusive trading, violations of anti-corruption rules and misconduct in accounting and financial reporting.  In the last year alone, the Commission brought a record 868 enforcement actions.  And for the first time, the Commission devoted significant resources and emphasis on using cutting edge data analytics to uncover and investigate misconduct resulting in numerous enforcement actions involving insider trading, asset management and complex financial instruments.

As a result of the successful whistleblower program, the Commission has awarded more than $100 million, since inception — virtually all during Chair White’s tenure — to whistleblowers who provided key original information that led to successful enforcement actions.

Under Chair White’s leadership, the Commission made significant enhancements to its examination program, including increasing staff by about 20 percent by hiring new examiners where funding permitted and redeploying staff from other program areas to heighten focus on the fast-growing investment management industry.

The exam program also increased its use of advanced quantitative techniques to enable examiners to detect misconduct by more quickly analyzing large amounts of data.  Over the past year, the examination program conducted more than 2,400 formal examinations of registrants, an increase over each of the prior seven fiscal years.  The Commission also enhanced technology in its examination program through the National Exam Analytics Tool (NEAT), which enables examiners to analyze large volumes of trading data much more efficiently.

Chair White serves as a member of the Financial Stability Oversight Council and on several other domestic and international organizations, including the International Organization of Securities Commissions, the Financial Stability Board, the International Financial Reporting Standards Foundation Monitoring Board, the Financial and Banking Information Infrastructure Committee, and the Federal Housing Finance Oversight Board.

Chair White added, “It has been and will always be critical for this agency and the public that the SEC remain truly independent.  That independence is crucial to our ability to protect investors, safeguard our markets and facilitate the capital formation that fosters innovation and the growth that is essential to our national economy.”

Prior to her arrival at the Commission, Chair White spent decades as a federal prosecutor and securities lawyer.  As the U.S. Attorney for the Southern District of New York from 1993 to 2002, she prosecuted cases involving complex securities and financial institution frauds, other white collar crime and international terrorists.  She also served as an Assistant U.S. Attorney and was Chief Appellate Attorney of that office’s Criminal Division.  She served as Acting U.S. Attorney for the Eastern District of New York as well as the First Assistant U.S. Attorney.  In private practice, she was a litigation partner and chair of the litigation department of Debevoise & Plimpton LLP, overseeing more than 200 lawyers.  Chair White is also a member of the Council on Foreign Relations and the American College of Trial Lawyers.

Two BNY Mellon Wealth Management Strategists Earn Prestigious Industry Recognition

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Two BNY Mellon Wealth Management Strategists Earn Prestigious Industry Recognition
CC-BY-SA-2.0, FlickrFoto: courtesy photo. Dos estrategas de BNY Mellon Wealth Management han sido reconocidos por The American College of Trust and Estate Counsel

Wealth Strategists Pamela Lucina and Justin Miller of BNY Mellon Wealth Management have been elected as Fellows of The American College of Trust and Estate Counsel (ACTEC) in recognition of their professional accomplishments. ACTEC is a nonprofit association of lawyers and law professors skilled and experienced in the preparation of wills and trusts, estate planning, probate procedure, and administration of trusts and estates. Lawyers and law professors are elected to be ACTEC Fellows based on their outstanding reputation, exceptional skill, and substantial contributions to the field by lecturing, writing, teaching and participating in bar activities.
 
Chicago-based Lucina is Managing Director, Head of Global Family Wealth Strategy. Miller, a National Wealth Strategist, is based in San Francisco where he also is an adjunct professor at Golden Gate University School of Law.
 
Lucina joined BNY Mellon Wealth Management in 2014 and has nearly 20 years of financial services and wealth planning experience. Over her career she has held several leadership roles providing wealth and estate planning to high net worth clients and is recognized for her expertise in serving those with highly complex needs. She earned a Juris Doctor degree from DePaul University College of Law, where she was a member of the Business Law Journal, and she received her bachelor’s degree from Marquette University. Lucina is a frequent speaker at national professional associations and conferences on myriad estate and tax planning topics, and has published in Trusts & Estates as well as other leading professional journals. Among the many professional and community groups she is involved with, Lucina is a board member of the Chicago Estate Planning Council, and sits on the short course planning committee for the IICLE.
 
Miller joined BNY Mellon Wealth Management in 2011 and works collaboratively with other advisors to provide comprehensive wealth planning advice to clients and their families. Prior to that he was an attorney at a major law firm, where he advised high net worth clients regarding tax-efficient estate and business succession planning, trust law and management, and asset preservation. He earned a Master of Laws in taxation and a Juris Doctor from New York University School of Law and a bachelor’s degree from the University of California at Berkeley. Miller is a frequent speaker on tax, estate planning and family governance topics at leading conferences throughout the country. He has published numerous articles, and is frequently quoted in the media. Miller has served as an executive committee member of the State Bar of California Taxation Section, and is the former editor-in-chief of the California Tax Lawyer.