BofA Finds 75% of Mid-Sized Businesses Expect Revenue to Increase in the Next 12 Months Despite Economic Challenges

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Despite economic challenges, 75% of mid-sized business owners expect their revenue to increase and 71% are planning to hire over the next 12 months, according to the inaugural Bank of America Mid-Sized Business Owner Report. The study is based on a survey of more than 300 mid-sized business owners (MSBOs), with $5 million to $50 million in annual revenues, and focuses on their business and economic outlooks.

“The strength of mid-sized businesses is essential to the health of the U.S. economy,” said Raul Anaya, President of Business Banking at Bank of America. “Preparation, optimism, and flexibility are traits of successful leaders in this environment, with investments in the workforce and digital transformation topping their current list of priorities to remain resilient and position their businesses for growth.”

MSBOs maintain a positive outlook, as 75% plan to expand their business and 67% expect the national economy to improve over the next 12 months. Additional insights into mid-sized business operations and financing in the current environment include:

  • Macroeconomic challenges in recent years, including inflation, the threat of a recession, and supply chain issues, are driving companies to make operational changes, such as raising prices (45%), revaluating cash flow and spending (37%), increasing employee wages (35%), and reducing business costs (33%).
  • 90% of MSBOs plan to obtain funding to finance their businesses over the next 12 months, including through business credit cards (43%), traditional bank loans (38%), personal savings (27%), personal credit cards (25%), and venture capital funding (21%).
  • Perspectives on financing are not one size fits all. For example, 59% of businesses say they’re looking to obtain financing to weather rising interest rates, while 23% say the rising interest rates make them less likely to seek financing.
  • Among the more than half (54%) of MSBOs who plan to apply for a bank loan or line of credit in the next 12 months, they plan to use these funds to: invest in new technology (43%), invest in new equipment (37%), and market/promote their business (35%).

Digitization on the Rise

Over the last 12 months, 90% of MSBOs have adopted digital strategies to further optimize their businesses and operations, with new digital tools helping them to save time (48%), increase customer satisfaction (43%), manage cash flow (43%), stay organized (41%) and reach new customers (37%). Additional ways innovation is at play within mid-sized businesses include:

  • 87% plan to further utilize automation and artificial intelligence to stand out from competitors (45%), assist with hiring (45%), and streamline payroll and bookkeeping (43%).
  • As the use of digital wallets and cashless payments continues to grow in popularity, 76% of MSBOs anticipate that all their transactions will eventually be digital.
  • 71% say the marketing of their business is now done primarily online or through digital-first channels.
  • 88% see cybersecurity as a threat to their business, and as a result are further investing in digital security systems (65%) and storing less business information online (39%).

“The digital landscape is complex and fast-moving,” added Anaya. “Staying on top of the latest innovations can help business owners create efficiencies, manage risk and unlock value that gives them a competitive edge.”

Employees are the most valuable asset of any company, and current labor shortages have challenged business owners looking to attract and retain talent. Our report found that many MSBOs struggle to find skilled, experienced employees. To attract qualified candidates, many MSBOs are increasing salaries (43%), offering more PTO (40%), strengthening retirement benefits (36%) and introducing new employee training and resource groups (34%).

Given the complexity and competitiveness of this labor market, MSBOs are also employing strategies that emphasize their commitment to retaining their existing employees. Four out of five (78%) business owners say the following actions over the last year have led to a meaningful impact in employee morale and/or retention:

  • Increasing paid time off (PTO) (39%)
  • Offering cost-of-living bonuses (38%)
  • Providing additional healthcare benefits (37%)
  • Augmenting retirement benefits (34%)

To read the full report you can access to the following link

 

How to select an investment vehicle? 6 Key Aspects

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The Natixis IM survey reveals that portfolio managers’ most significant concern continues to be the increasing inflation rate (70%), followed by a sustained rise in interest rate (63%). Despite this outlook, investment advisors remain optimistic.

According to the same source, asset funds, sustainable investments, and private assets are the focus of portfolio managers for the remainder of 2023.

In this regard, investment fund managers see potential opportunities in the rising interest rates that accompany inflation, making fixed-income instruments a significant player during 2023.

However, the returns offered by these instruments in some Latin American countries are favorable for attracting investors through offshore investment vehicles, helping to increase their distribution in international private banking.

Several alternatives in the market allow for securitizing a fixed-income investment strategy or any portfolio with diverse underlying assets. When making a choice, it is essential to consider the following aspects:

Cost: There are two main costs associated with an investment vehicle. The first is related to the structuring and launch of the investment vehicle, and the second refers to the expenses related to its daily maintenance. Both cost elements are crucial when selecting a suitable investment vehicle to avoid penalizing investors with high structural costs impacting their returns.

Trading Hours and Operations: Some European investment vehicles may not offer operational and tradable hours fully compatible with those in the Americas. This is particularly important when the investment strategy requires quick execution of subscription and redemption orders by the trading desk.

Distribution and Custody Capacity: One of the main criteria for selecting an investment vehicle should be its potential for future distribution. Nowadays, registering investment funds on certain private banking platforms can be a costly, lengthy, and tedious process.

Transparency and Disclosure: Ensuring the investment vehicle provides clear and detailed information about its investment strategy, underlying assets, and associated risks. Transparency and proper disclosure are fundamental for investors to make informed decisions.

Flexibility and Diversification Capability: It is especially important to consider whether the investment vehicle is flexible enough to package multiple asset classes. This will allow for portfolio diversification and the application of hedging and covered call strategies.

Launch Time: The timing and synchronization between the vehicle’s launch and capital raising is usually crucial for asset managers. It is not only about the structure having an agile “time to market” but also about coordinating inflows from investors promptly.

In this context, the following is a comparative analysis between the Active Management Certificate (AMC) and FlexFunds‘ FlexPortfolio, where you can learn about the advantages and disadvantages of each:

AMCs present themselves as a flexible alternative with the capacity to solve the scalability issue. Due to their nature as structured products, they may be more complex and may not share many of the advantages offered by ETPs (Exchange Traded Products).

On the other hand, the FlexPortfolio is an internationally recognized solution for asset managers seeking a quick and efficient structure to launch various investment strategies. It is an investment vehicle that allows for the securitization of multiple listed asset classes.

It transforms an investment strategy into a negotiable security listed on a stock exchange and distributable through Euroclear. This way, asset managers can significantly expand the distribution of their portfolios.

Among the main advantages offered by the FlexPortfolio are:

Flexibility:

The FlexPortfolio offers broad flexibility in the underlying assets that can be repackaged

Ease of distribution:

Investors can access the investment strategy you design directly from their own brokerage accounts. It is a simple securities purchase operation with an ISIN-CUSIP number.

The FlexPortfolio is a Eurocleable investment vehicle. Therefore, your investment strategy can be distributed globally.

Operational Capacity:

There is little or no restriction concerning rebalancing or trading the underlying FlexPortfolio’s account.

The manager can perform all trades directly in the brokerage account without the involvement of third parties.

FlexPortfolio allows direct access and trading of your brokerage account 24 hours a day, 7 days a week, regardless of the time zone.

Security of issuance:

The investment strategy is backed by the underlying assets and utterly independent of the promoter’s activities.

Possibility of leverage:

Leverage can be available for many strategies. At FlexFunds, through Interactive Brokers, we offer you the possibility to trade on margin.

Competitive Costs:

The FlexPortfolio can have no set-up or maintenance cost, making it a very cost-efficient investment vehicle.

Speed of launch:

The setup and launch of the FlexPortfolio usually take between 6 and 8 weeks. This can be less than half the time required by other alternatives in the market.

In summary, the selection of an investment vehicle will depend, among other factors, on the underlying assets you wish to repackage, the available time and cost, future distribution needs, and operational requirements.

The FlexPortfolio offers a simple, flexible, agile, and cost-efficient solution for asset managers. Consider our FlexPortfolio when evaluating an AMC or any other investment vehicle. You can contact FlexFunds through the following email address info@flexfunds.com, and one of our representatives will contact you to assess the solution that best suits your needs and investment strategy.

Emilio Veiga Gil , Executive Vice President and Chief Marketing Officer for FlexFunds.

Iván Palacino Joins Bolton Global Capital in Miami

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Bolton Global Capital is pleased to welcome Ivan Palacino as the latest financial advisor to join the firm.

Palacino is a seasoned international financial advisor with over thirty years in the business, servicing high net worth clients and institutions in Colombia, Mexico, and Venezuela.

He started in the financial industry in his native Colombia working for Banco de Credito. Later in his career he worked at Salomon Smith Barney, Lehman Brothers and Barclays Capital Inc, before ultimately joining Morgan Stanley in 2013 as a Vice President.

“We are looking forward to working with Ivan. He is an insightful industry veteran who undoubtedly will be a key player for the Bolton team. As we continue to grow, having an advisor of Ivan’s caliber is definitely an exceptional asset for us“ said Michael Averett, Bolton’s Head of Business Development.

Palacino holds degrees from the Universidad De Los Andes as Specialist in Negotiation and International Affairs and a B.S from the Universidad del Rosario in Business Administration. He will be working in the Bolton Global Capital offices at the Four Seasons Tower in Miami.

The Great Influence of Disinflation and an Optimistic Soft Landing Narratives Over US Assets

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soft landing, hard landing
Pixabay CC0 Public Domain

Mergers and acquisitions activity was materially stronger in the second quarter, increasing 33% compared to the first quarter of 2023, and it marked the strongest quarter for new deal activity in the last 12 months. Despite this pickup in activity, dealmaking in the first half totaled $1.3 trillion and is still 37% lower than the first half of 2022. The Healthcare sector has been the most fertile ground for dealmaking in 2023, with deals totaling $188 billion, an increase of 43% compared to 2022 levels and the sector accounted for 14% of all M&A. Energy & Power and Technology each accounted for 14% of dealmaking in the first half as well. Private Equity accounted for 21% of total M&A in the first half, down from 26% in 2022, as total volume reached $279 billion, a decline of 49% compared to the first half of 2022.

Strategy performance in June was bolstered by closed deals including Qualtrics (XM-Nasdaq), Prometheus Biosciences (RXDX-Nasdaq), U.S. Express Enterprises (USX-NYSE), and BELLUS Health (BLU-Nasdaq), as well as spreads that generally firmed following a volatile May. The strategy also benefitted from a bidding war that emerged for CIRCOR International (CIR-$56.45-NYSE), a manufacturer of flow control products

U.S. stocks were higher for the month as encouraging indications of disinflation and optimistic soft landing narratives took hold. Recent economic data has revealed a greater prevalence of disinflationary trends, exemplified by May’s Consumer Price Index (CPI) exhibiting a softer-than-anticipated figure. In fact, the headline CPI recorded its lowest annual increase in over two years. Throughout this month, mega-cap tech stocks displayed notable strength, propelled by sustained optimism surrounding artificial intelligence (AI), despite a few sell-side downgrades and apprehensions that the market may have already overbought AI-related tech names.

Earlier in the month, after tense negotiations, Congress approved a deal to raise the government’s borrowing limit that helped prevent a potential economic catastrophe. This deal suspends the U.S.’s debt limit until January 2025, allowing the federal government to keep borrowing money so it can pay its bills on time.

On June 14, the Federal Reserve decided to not raise rates, leaving the targeted federal funds rate at 5.00-5.25%. This pause in June signifies a significant milestone as it represents the first policy meeting in which the Federal Open Market Committee (FOMC) refrained from raising interest rates since it began its monetary policy tightening cycle in March 2022. Fed Chair Jerome Powell lauded the resilience of U.S. growth and the job market, emphasizing their robust performance that surpassed initial expectations amidst the backdrop of an assertive monetary policy tightening over the past year. The next FOMC meeting is July 26-27.

Mega-cap tech stocks continued to be the prime beneficiaries of the recent positive momentum regarding artificial intelligence, helping the S&P 500 (+6.5%) and Nasdaq (+6.6%) extend their streak of monthly gains to four months, while the small-cap Russell 2000 Value (+7.9%) had its best month since January. We see abundant opportunities in small to mid-cap stocks, given the compelling valuation of the Russell 2000 Value, which currently trades at only 10-12x earnings. This stands in stark contrast to the broader market, which hovers closer to 20x earnings, representing one of the biggest deltas we have ever witnessed.

In June the convertible market moved sharply higher as investors were willing to take on risk again. The rally was broad in scope across the market with equity alternative convertibles contributing the most to index performance.  We have highlighted the value in total return and fixed income equivalent convertibles over the last few quarters, and these holdings performed well as equities moved higher. We still see opportunity in a balanced convertible portfolio. While the market took a risk-on stance in June there is still a wall of worry it must climb to return to previous highs and beyond. Convertibles offer a risk adjusted way to participate in this market. Investors can own equity sensitive convertibles in companies where they have conviction while benefiting from the asymmetrical profile of total return and fixed income equivalent convertibles. Yields to maturity are no longer as excessive as they once were, but many are still quite attractive in companies that are appropriately managing their balance sheets and cash flows.  These are often convertibles within a few years of maturity that we expect to accrete to par over that time. These convertibles should have limited downside from here and we expect them to outperform equities in a flat, down, or volatile market.

New convertible issuance this month came at a reasonable pace. We continue to be on track for a better year of issuance than we saw in 2022, but below the peak years of 2020 and 2021. What we did see this month was a healthy mix of new and returning issuers to our market. New issuance has generally been attractive with higher coupons, lower premiums and more asymmetrical returns than are available in the secondary market. We have continued to see companies buying back convertibles in a transaction that is accretive to earnings and positive for the credit. We expect this bid to continue to benefit some positions in the fund.

 

Opinion article by Michael Gabelli, Managing Director and President of Gabelli & Partners. 

Foreign Managers in China Tap into Strengths

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Photo courtesyIsabel Campillo, Carmen Garcia & Cristina Rubio, Capital Strategies team

To compete effectively in China’s mutual fund market, foreign managers in China will need to demonstrate the advantages of their investment methods and find their niche areas.

China’s RMB26 trillion (US$3.6 trillion) mutual fund market continues to attract global asset managers, and eight wholly owned foreign fund firms have been set up in the market to date.

Backed by professional research teams, as well as extensive global investment experience, foreign managers can provide innovative solutions to meet the diverse needs of investors.

Foreign managers can use these strengths in areas that are relatively new to China, such as pension funds, index funds, sustainability-themed funds, and Qualified Domestic Institutional Investor (QDII) funds. They can also rely on their expertise to provide investors with more personalized and scientific programs, such as quantitative strategies and robo-advisor platforms.

Foreign fund managers with established global brands have no problem attracting investors’ attention. However, no matter how strong their financials, investment philosophies, and risk control systems are, global managers in China still need to provide excellent performance and service.

Many local fund managers have started to refine their investment processes in recent years, and they are increasingly focused on the stability of investment processes and portfolio risk management.

Most foreign fund managers have entered the Chinese market through joint ventures, with only a few starting their activities in the form of solely foreign-owned or foreign-controlled businesses in the past three years. This means they tend to have a smaller domestic customer base and relatively weak fund distribution channels compared to local companies. Foreign managers that are lagging in traditional distribution partnerships with banks may find it expedient to partner with other distributors. Cerulli believes that enhancing cooperation with top securities firms focused on wealth management and online platforms will bring about opportunities for growth.

Foreign fund managers also face fierce competition from local firms in attracting and retaining talent. Still, they have managed to recruit star managers who are familiar with the domestic capital market and possess local investment experience.

Local talent who choose to join foreign managers tend to do so for culture reasons, as the work pressure is generally less intense in foreign firms, and they provide more attractive benefits and better work-life balance.

“The entry of global fund houses has intensified competition in China’s asset management industry, but offers opportunities for the entire industry to develop,” said Joanne Peng, research analyst with Cerulli Associates. “For foreign mutual fund managers to succeed in the market, they will have to work on their ability to achieve stable returns and control the risks of their products.”

New Data Shows Shifts in Texas Real Estate Markets

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The median price of homes sold in Texas in the second quarter decreased 3.1% compared to one year ago, according to the 2023-Q2 Quarterly Housing report released today by Texas Realtors. During the same time frame, the number of closed sales also decreased, while the number of homes available for sale increased.

“There’s a saying that all real estate is local, and the second quarter this year showed how true that is,” said Marcus Phipps, 2023 Chairman of the Texas Realtors. “While the statewide median price eased down, median prices are actually up in about half of Texas markets. Despite that variation, the average number of days that homes spent on the market was up in every metro area, and the number of homes available increased in nearly every metro as well.”

The median sales price of Texas homes for Q2 2023 decreased to $345,000 from $357,388 in the same period last year. Texas homes spent an average of 87 days on the market before closing in the second quarter, which is 20 days longer than a year ago.

The price distribution of properties sold in the second quarter shows a slight decrease in high-end homes as a percentage of total sales. Homes that sold for at least $750,000 made up nearly 10% of homes sold in the second quarter last year, while that price range accounted for 8.7% of sales in Q2 this year. Half of properties sold in the second quarter this year were in the $200,000 to $399,999 price range, up from 45.8% of all sales a year ago.

Months of inventory—or how long it would take to sell all homes on the market at the current pace of sales—increased from 2 to 3.2 months from the same period last year. While the increased inventory is a welcome trend for buyers, it still indicates a tight supply of homes. Researchers at the Texas Real Estate Research Center say that a market balanced between supply and demand is in the range of 6 to 6.5 months of inventory.

“General trends provide an indication of the overall market, but buyers and sellers will want to work with a Realtor who really knows the specific area,” said Chairman Phipps. “Not only can small changes in location make a difference, but each property is different. A Realtor has the knowledge to help buyers and sellers sort through all the variables to achieve the best results.”

Miami-Dade Innovation Authority Launches First Public Challenge, Seeks Novel, Sustainable Uses for Sargassum

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Photo courtesy

The Miami-Dade Innovation Authority, Inc. (“MDIA”), a nonprofit that works to strengthen the relationship between local government and technology companies as a way to identify and scale innovative solutions that improve the quality of life for Miami-Dade County residents, has announced its first-ever public innovation challenge.

Kicking off Wednesday, July 12, 2023, the open call seeks novel and sustainable uses to beneficially repurpose sargassum, a type of seaweed known for forming large floating mats that wash up on beaches across the world during the warm summer months. As part of this challenge, the MDIA will select at least three (3) early-to-growth stage technology start-ups and award each $100,000 to fund the further research and development around sustainable solutions that process sargassum in an environmentally responsible manner and prioritize the health and safety of end users.

In addition to the six-figure investments, selected companies will be shortlisted to participate in a product testing program directly with Miami-Dade County and local institutions beginning next spring, during the onset of the 2024 sargassum seaweed season.

The MDIA will oversee each testing process and will work closely with the portfolio companies to publish a report on the outcomes and results, as well as activate its network of partners and resources to publicize the report and key findings.

“The MDIA is dedicated to cultivating a thriving innovation ecosystem in Miami-Dade County,” said Leigh-Ann A. Buchanan, President & CEO of MDIA. “We are thrilled to officially launch the first in a series of public innovation challenges that will provide entrepreneurs access to critical funding necessary to test and validate their ideas in a real-word environment, foster collaboration, and drive economic prosperity by harnessing the power of technology to solve the critical issues impacting our community.”

Sargassum plays an important role in marine ecosystems, providing shelter and food for both small marine creatures and larger fish in the open ocean, and depositing prey-rich wrack onshore for shorebirds. Unfortunately, periodic blooms of the macroalgae are increasing in frequency and size, causing large mats to accumulate along Florida’s Atlantic coast, releasing hydrogen sulfide gas that can cause breathing difficulties when decomposed. It also irritates the eyes, nose and throat, causes a burning sensation, and expels a malodorous odor; ultimately impacting Miami-Dade’s local fishing and tourism industries, and necessitating expensive collection, removal and clean up.

“Miami-Dade County sits uniquely at the intersection of environment and innovation. We’ve spent over $4.2 million on sargassum cleanup in 2022 alone. And while this naturally occurring event can disrupt our beautiful beaches, we are committed to finding environmentally friendly solutions to mitigate its impact and protect the wildlife that depend on its shelter,” said Miami-Dade County Mayor Daniella Levine Cava. “We know that by partnering with our public and private sector partners, we’ll catalyze new ways to turn this challenge into an opportunity for Miami-Dade County and coastal communities worldwide.”

The Nature Conservancy in Florida (TNC) — a global conservation organization working to create a world where people and nature can thrive — will convene subject matter experts to support the evaluation and selection of the winning companies, to be announced in December 2023.

“The Nature Conservancy is thrilled to work alongside the Miami-Dade Innovation Authority and Miami-Dade County, to foster community engagement and identify cutting-edge technologies that will transform this environmental challenge into a benefit in Miami-Dade and beyond. Sargassum is a vital part of a healthy ocean, but like sunlight and rainfall, too much can be harmful. Increasing sargassum blooms are attributable to many factors, including changes in ocean currents, extreme weather, and warming waters associated with climate change,” said Morgan Higman, Florida Climate Strategy Director, The Nature Conservancy.

Founded as an outcome of a collaboration with Miami-Dade County and key technology leaders, MDIA launched in 2023 with an equal match of private, public and philanthropic funding from The John S. and James L. Knight Foundation, Citadel founder and CEO, Ken Griffin; and Miami-Dade County, for a total of $9 million in seed funding. This challenge is the first in a series of open calls launched by the MDIA as it works to tackle Miami-Dade’s most pressing challenges including health, housing, climate, transportation, and education and opportunity.

Overall, MDIA aims to launch three public challenges throughout each year, with the goal of distributing more than $1 million annually, serving as a blueprint for other cities and municipalities across the world to fast-track innovation to improve the quality of life for residents. As with all business and economic development opportunities, Miami-Dade County is committed to supporting the growth of diverse businesses and advocating for equitable participation of minority and women entrepreneurs in economic opportunities.

The deadline to submit proposals is Friday, September 29, 2023. To submit, please visit the following link.

Axxes Capital Appoints Shane Cunningham to Lead U.S. Offshore and LATAM Distribution

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Photo courtesyShane Cunningham, Axxes Capital Managing Director and Head of U.S. Offshore & LATAM Distribution

Axxes Capital announced it has appointed former Franklin Templeton executive Shane Cunningham as Managing Director and Head of U.S. Offshore & LATAM Distribution.

In his new role, Cunningham will lead the firms’ offshore initiatives across all sales and marketing-related activities for the U.S. Offshore and Latin American intermediary markets and manage all third-party distributors for the region. 

Cunningham brings a wealth of experience to Axxes Capital, following a distinguished career at Franklin Templeton spanning more than 20 years and crossing three decades.

His tenure at Franklin Templeton culminated in his role as a Senior Vice President and Offshore National Sales Manager, where he successfully led the offshore sales team covering the NRC market, Canada, and the Caribbean Islands. He also served as President and CEO of Templeton Franklin Investment Services (TFIS) broker-dealer. 

Axxes Capital’s Founder, Chairman, and CEO, Joseph DaGrosa, Jr., welcomed Cunningham’s  appointment: “The addition of Shane rounds out our highly experienced sales and distribution  leadership team, allowing us to execute on our global growth strategy.”

Parker Roy, Global Head of Distribution at Axxes Capital, added “With Shane’s 20 plus years of experience in US Offshore and LATAM, we look forward to leveraging his insights to deliver attractive private  market solutions specific to this marketplace.” 

Most High-Net-Worth Investors Hire First Advisor They Speak With

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Dynasty Financial Partners announced the results of a Dynasty Connect survey of 1,000 high-net-worth respondents, all of whom work with a financial advisor. The respondents each had a minimum of $500,000 in investable assets. The survey was conducted in partnership with Absolute Engagement between April 20-May 1, 2023, and has a 3.1% margin of error.

According to the survey, a surprising number of wealth-management clients do not shop around before choosing a financial advisor. Instead, they work with the first financial advisor they speak with.

When asked, ‘With how many advisors did you have a conversation prior to hiring your current advisor?’ 57% of respondents stated that they had ‘only spoken to their advisor.’

“It’s an extraordinary finding that high-net worth families are selecting the first and only advisor they speak with. It’s like buying the very first house you look at,” according to Dynasty Financial Partners CEO, Shirl Penney. “At Dynasty Connect, we provide due diligence and deep understanding of the options wealthy families have when seeking financial advice and introduce those families to independent financial advisors suited to meet their needs.”

Trigger for Seeking Advice

In addition, the survey highlighted that a ‘life event’ was often the trigger for seeking professional advice. These life events include ‘received an inheritance,’ and ‘change in employment situation.’

“These findings about life events triggering the need for professional advice highlight the need for high-net-worth families to conduct appropriate due diligence. Investors need to ensure their chosen advisor has the right experience to handle the often-complex nature of these life events for families of significant wealth,” said Mr. Penney.

“Our goal is to ensure a wealthy individual or family can find a financial advisor who dovetails with their needs, personality, and vision,” he said. “It’s paramount to find a ‘custom fit’ in your advisor so you together may achieve your goals.”

Informal Referrals to a New Advisor

The Dynasty Connect Survey also found that when seeking a new advisor, 46% of respondents were referred by ‘a friend, family member or colleague.’ Respondents under the age of 45 are less likely to rely on referrals and use multiple sources to identify potential advisors. Those younger respondents were about 3-times as likely to find a new advisor using online searches, social media, blogs or other online sources.

“Sadly, data show that relying on your friends and family for referrals may not be the wisest strategy for these wealthy investors, as everyone’s circumstances and needs are unique,” explained Mr. Penney.

The survey results underscore that many high-net-worth individuals are not fully aware of the availability or value of a highly-customized relationship with their advisor, according to Mr. Penney.

“At Dynasty Connect, we want to increase awareness and educate families about the benefits of a strong client-advisor relationship,” he said.

Advisor “Churn”

Highlighting the due diligence gap was subsequent advisor ‘churn’. According to the survey, 61% of respondents under the age of 45 that had changed advisors in the past said they changed because of a mismatch in the relationship, described as ‘looking for a different/specific expertise.’

If high-net-worth investors don’t feel they are in a trust-worthy, high-value relationship with their advisor, they end up switching, according to the survey. Respondents said they switched their advisor for reasons ranging from ‘investment performance’ to ‘I didn’t feel like a valued client’ to ‘I needed different or specific expertise.’

“By performing appropriate due diligence, wealthy families could select an advisor that is a better fit from the beginning, instead of expending a lot of time and energy with the wrong advisor,” added Mr. Penney.

Amundi Announces Partnership with Excel Capital to Expand Presence in Chile and Uruguay

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Pixabay CC0 Public Domain

Amundi announced a partnership with Excel Capital (XLC), based in Santiago, Chile, to  further expand the distribution of its UCITS funds across retail market channels in Chile and Uruguay.

With this alliance, Amundi will strengthen its presence in the region and expand its commitment to distribution partners,  private banks and asset management firms in the South Cone.

Excel Capital is one of the largest and most experienced distributors of foreign mutual funds in the Andean Region.  

Lisa Jones, Head of the Americas, President and CEO of Amundi US, said: “This partnership further  supports our long-term commitment to the region and our dedication to serving our clients. As one of the world’s  ten largest asset managers, Amundi has the deep resources and expertise to bring important new opportunities  to our distribution and banking partners in Chile and Uruguay. Excel Capital is well known and respected and we  are excited to partner with them on this expansion of our strategy.”  

Felipe Monardez, Managing Partner of XLC, said: “Amundi is a powerhouse and market leader with an  impressive number of actively managed funds covering different regions and asset classes benefiting our clients  with best-in-class offerings. We look forward to working with Amundi and building a strong presence with retail  investors in the region.”  

Amundi opened its office in Santiago in 2008 and has long served the needs of institutional and retail clients in  the region. Given the strong demand for active management offered by leading global asset managers, Amundi  is expanding its ability to better serve distribution and wholesale partners across Chile and Uruguay.