Many investors have expressed concerns about the recent deposit outflows and the attrition of TD Ameritrade advisors and customers, which have had a negative impact on Charles Schwab shares. However, William Blair analyst Jeff Schmitt suggests that these problems may soon diminish. In a recent research note, Schmitt recommends buying Schwab stock, noting that it currently trades at a modest 13.5 times his 2024 EPS estimate, compared to its historical average of 20 times. According to Schmitt, "Now is a good time to play the potential rebound as the risk/reward dynamic has shifted."
Father-Son Team Finds New Opportunities
Burke Francis and his son Christopher have made the decision to depart from Morgan Stanley and join LPL Strategic Wealth Services. LPL specializes in assisting advisors who wish to break away from large brokerage firms and establish independent practices. Operating under the name "The Francis Group," the team is based in Westlake Village, Calif., a suburb of Los Angeles. Burke Francis explains their change in mindset, saying, "We used to tell our clients 'bigger is better,' but we realize that isn't the case anymore."
Embracing Diverse Fee Structures
While the traditional 1%-of-assets fee model remains prevalent, many financial planners are now exploring alternative revenue sources. According to Wealthramp, an advisor matching service, since 2020, approximately 61% of individuals seeking financial advice have specifically requested hourly or flat-fee arrangements rather than a pricing model tied to a percentage of assets under management (AUM). Our contributors Pam Krueger and Allan Slider emphasize that embracing alternative fee structures can be an excellent strategy for serving younger high-earning clients.
Investors and advisors alike are finding new opportunities and evolving their strategies within the wealth management industry.
Captrust Secures New Private-Equity Investor
Captrust, a prominent U.S. registered investment advisor, has achieved impressive growth through a series of strategic acquisitions. In order to further support and finance its expansion, the firm had previously sold a minority stake to private-equity shop GTCR three years ago. However, in a move to bolster their resources, Captrust recently sold a minority stake to Carlyle, placing a valuation of over $3.7 billion on the company.
UBS Charts Its Path Forward
Swiss Bank UBS finds itself amidst a flurry of activity as its executives work tirelessly to integrate their former rival, Credit Suisse. CEO Sergio Ermotti revealed that the integration process has demanded their full attention. Additionally, UBS is currently crafting a comprehensive three-year strategic plan set to be unveiled in February. By acquiring Credit Suisse earlier this year, UBS has created a formidable wealth management powerhouse dedicated to serving the world's affluent and ultrawealthy individuals.
Assessing the Global Impact of China's Economic Slowdown
With China's economy experiencing a gradual deceleration, the reverberations are expected to be felt worldwide. Wealth managers were approached to gauge their outlook on China's potential major influence on the global economy and U.S. markets. In general, there is a sense of cautious optimism among these professionals. While certain U.S.-based global companies reliant on Chinese consumption may face some challenges, there may also be opportunities for emerging nations. Furthermore, the restructuring of the global supply chain could result in favorable conditions for midsize and small companies seeking growth.
Creative Planning to Acquire Goldman Sachs' Personal Financial Management Business
Creative Planning's CEO, Peter Mallouk, and managing director, Jessica Culpepper, shed light on the firm's recent decision to purchase Goldman Sachs' $29 billion-asset Personal Financial Management business. As part of our 2023 Top 100 RIA Firms ranking, Creative Planning has secured the No. 3 spot. Mallouk and Culpepper also discuss the firm's ongoing focus on client acquisition.
Stay tuned for more updates.