Gaining Clarity | 3 April 2020

How are you helping clients understand and build resilience to risk ?

The Federal Reserve continues to be a beacon of stability to support the global markets and provide needed liquidity whenever possible. American companies, business owners and investors are looking for help to prepare for a potential extended period of volatility and uncertainty.

The federal government has been poised to be proactive and work from their front foot to support the markets at the critical times. Whether you’re an investor, advisor or fund manager, the speed, pace and growth of this market has tested the most prolific of investment professionals.

Market volatility tends to cluster so we can expect to see more of it. While clients are looking to their for that all clear signal to back up the truck, loss aversion can lead them back to risky assets. While it can be debated that this time is different, connect with your trusted experts, gather and share your observations and move closer to your client.

Let’s commence the Week in Review –

Early findings from our research and communication with advisors through their early client engagement:

We’re relentlessly speaking with advisors, investment professionals and investors so to maintain a real-time framewokrk. We have come to several initial conclusions from the market activity and investor decisions: 

• Exchange-traded Funds (ETFs) have proven to be successful in what they were originally designed to do.

The ETF ecosystem is robust and mitigated many of the lingering doubts about liquidity to support rapid investment/redemption action. Although there were some challenges with the US fixed income markets, they were limited and the speed that the regulatory bodies have responded in providing relief demonstrates confidence. And despite ongoing market volatility, we see resiliency in the market so opportunities for investing and rebalancing for the long-term are slowly emerging.

• The advisors relying on technology particularly for asset allocation and investment selection are being rewarded. They have expanded their use of data sources with being less dependent on a single source.

Technology acquisition and integration is paying off for them and they have been more client responsive, adaptive to market shifts and successful in onboarding new business through this time. Even our capital markets partners have learned the challenges of operating a global trading business by working on a remote basis. The advisor is looking for conduct the due diligence quicker to engage clients and the information must be clear and obvious.

• The importance of the advisor has never been more paramount as a financial guide, coach and resource for tax planning.

DIY investors have had a much different experience during this correction over any lessons of 2008 and earlier brought them. The leading advisors are providing counsel around wellness updates and nudging the clients to seek updated health assessments. With advisors refining their messages, referral programs are burgeoning with investors who are looking for objective planning, advice and tax management. Help them answer the question, “can I still achieve my goals ?”

Breakpoint Alerts

We still have a limited number of investor spots available to our invitation-only Breakpoint Alerts | Forecasts, our risk and regime forecasting that reflects stocks, FX, crypto and ETF movements, to help the active investors stay on top of these rapid market changes and execute investment decisions.  

Now’s the time to let us know of your interest.

Alternative data and resources for your COVID-19 Information Center

We plan to add new resources each week that we have reviewed which exhibit the environmental and economic impact to the U.S. and global systems.

Thee Anatomy of the $2 Trillion COVID-19 Stimulus Bill

COVID-19 Will Change Economics in Three Ways

The Math behind Social Distancing

Why It’s So Hard to Make a Good COVID-19 Model

Our advisor community continues to compile alternative information to enhance their research process and client narrative so we always welcome your suggestions.

Posts

Here are the posts most read on Portformer.com:

• Portformer Performance During Market Correction
• Tactical Alert – Fed will Buy Bond ETFs
• Tactical Alert – Adjusting to ETF-ETN Fund Closures
• Fintwit Influencer Analysis

Question of the Week:

What were some of the best experiences that you had with your providers and partners that you can share ?

Please share with us via our chatbox at Portformer or reply to this email and the information will remain confidential.

What we’re Reading:

Here is a snapshot of the best articles compiled and read by our team:

Hidden Asset ETFs Appetite for Active Managers– Bloomberg story on launch of non-transparent ETFs and the timing.

Dispelling the Misconceptions of ETFs in three ways– Excellent CFA article on how ETFs have dispelled market misperceptions recently.

Portfolio Directions for Uncertain Times: Models Portfolios, Volatility – Article from a TAMP executive on how new model portfolios can provide stability during market volatility.

Financial Advisory Firms Eyeing Government Financing Options– Article on RIA owners evaluating the financing options being presented through the stimulus program and tradeoffs.

The Smell of Fear – Article from Mark Tibergien on how advisors and owners should rise to the occasion during times of stress and volatility.

$4B RIA Drastic Decision One Day Before the Pandemic Was Declared– Story on decision by a large RIA to take clients completely to cash the day before the pandemic outbreak.

SEC Declines to Delay Rollout of the Reg BI-CRS Form Change– Update on SEC decision to move forward with Reg BI/Form CRS June 30 rollout to the advisor industry.

If you have any difficulty accessing these articles and papers, please reach us through our website or directly at john.dibenedetto@portformer.com.

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All of us have colleagues who require some assistance or a fresh perspective, do not keep us a secret. Forward this to them and you can find us on social media at Twitter @Portformer and LinkedIn at Portformer.

Our utmost concern is that you’re safe and secure with managing your way through this period. We stand ready to help you navigate what may be the most complex and challenging time that we have ever experienced. Social distancing is the highest priority and we encourage you to create ways to remain closest to your community.

Always be safe,

Sean Kruzel and the Portformer™ Team