Week’s Best: Wealth Management Worker Charged With Murder

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An employee with an LPL-affiliated firm has been charged in the stabbing death of two men—a co-worker and the co-worker’s roommate—in Anaheim, Calif. The suspect, Ramy Fahim, was found in the victims’ apartment suffering from a minor injury, along with a knife believed to be used in the crime, and was taken to a hospital and later arrested. He is being held without bail awaiting arraignment, scheduled for May 6.

Are low returns the new normal? As we enter the cooling-off phase following a gangbusters decade for the stock market, some professional prognosticators are forecasting a sustained period of returns below 2%. But we checked in with a series of top advisors who, though they acknowledge the challenging investing environment, aren’t buying into the sub-2% scenario, and actually have their hopes set far higher.

Does the Fed have it figured out? If the Federal Reserve accelerates its interest rate hikes in a bid to curb rising inflation, as Chairman Jerome Powell has indicated, the short-term fed funds benchmark could climb above 2% by this summer, and surge well past 3% by the end of the year. That suggests that advisors could soon find higher and less risky yields from short-term bonds than dividends. But don’t expect a stampede out of stocks, as some clients might want to take advantage of a buying opportunity if valuations continue to fall. Institutional investors could have the right idea when they counsel patience.

Vanguard’s trading restrictions. Vanguard has left some investors miffed after it announced new restrictions on certain over-the-counter securities trades, limiting activity in penny stocks that don’t trade on regular exchanges. The fund giant has been quiet about the policy shift, which it began alerting investors to earlier this month. Some commentators suspect it may in part be trying to curb clients’ trading in certain crypto products.

LPL’s big-time digital hire. LPL has hired a top executive who was heading up digital operations at Merrill Lynch, bringing in Kabir Sethi to serve as chief product officer. Sethi, who begins his new role next week, will oversee IT initiatives and the firm’s wealth management platforms, reporting directly to CEO Dan Arnold.

Much ado about … what? Direct indexing is among the buzziest trends in the wealth management sector, with heavyweight asset managers making big bets in the space. But new survey data indicate that advisors aren’t that interested. Direct-indexed accounts, which seek to track an index while also allowing individual investors to customize their holdings, are only in use by 12% of advisors polled by Parametric and Cerulli Associates. Only half of survey respondents said they are even familiar with the term.

Lastly, don’t miss our weekly Barron’s Advisor Q&A. Michael Nathanson, CEO of The Colony Group, explains how he transformed a $500-something-million-dollar RIA into a $19 billion powerhouse in less than two decades. M&A has been a key growth driver, with Colony acquiring 15 firms over the last decade, and Nathanson says that acquisitions can be a more efficient way of adding new talent than making individual hires in a tight labor market. He also argues against imposing a unified culture throughout multiple offices. 

Have a great weekend.

Write to advisor.editors@barrons.com