Market Insights

FINRA fines Fifth Third Securities $4M for variable-annuity violations & must pay $2M in restitution to customers

  • The Firm "fail[ed] to appropriately consider and accurately describe the costs and benefits of variable annuity exchanges," FINRA said in a release.

  • Fifth Third Securities also recommended variable annuity exchanges without a reasonable basis to believe the exchanges were suitable & must pay $2 million

  • FINRA found that brokers and principals were inadequately trained in how to compare material features of variable annuities resulting in the firm misstating the costs and benefits of exchanges, making the exchange appear more beneficial to the customer

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Trump Promises Aggressive Campaign to Cut Drug Prices

  • Donald Trump said he would propose the most sweeping plan in U.S. history to lower drug prices
  • Drug Plan includes immediate actions & longer-term policies that aim to:
    • Increase competition
    • Lower patients' costs
    • Create incentives for drug makers to lower base prices
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Embedded thumbnail for Investment & Economic Strategy Update: May 9, 2018

Investment & Economic Strategy Update: May 9, 2018

May 09, 2018
  • Job numbers are positive, Wage Inflation on the rise, Housing & Consumer Consumption numbers are stable

  • Tax cuts starting to take an effect in the economy and we believe its positive results will continue in 2018 & beyond

  • Iran deal has ended, but we believe it will have a minimal impact on U.S. & world economy

  • U.S. growth will help others grow (especially the emerging markets)

  • Normal Volatility is occurring and will continue

Embedded thumbnail for Question: "Stagnant Markets & Adjusting Your Portfolio?"

Question: "Stagnant Markets & Adjusting Your Portfolio?"

May 09, 2018
  • You shouldn’t make changes unless you identify a catalyst

  • Make adjustments when the reasons you bought the investment are changing

  • Historical evidence that the market will behave this way causing investments to be stagnant at times

The Flatter U.S. Yield Curve is Roiling Mom & Pop Investors

  • Structured debt products with initially high yields are now returning little or no income as well as capital losses

  • “They were sold as being conservative investments, which of course they are not” – Jeffrey Pederson, Denver attorney who represents investors in settlements against financial institutions

  • If the curve levels out – as it has been over the past year – buyers can be stuck with measly coupons or even no interest payments

  • “Your average person getting these things is Joe Salesman, and they end up losing a lot of money pretty quickly” if the curve flattens – Pederson

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LPL Financial Fined $26M over Unregistered Securities Sales

  • LPL offered and sold unregistered, nonexempt securities

  • LPL failed to reasonably supervise the flow of information to ensure full & proper compliance with state securities registration requirements

  • Deal between LPL & state securities regulators requires LPL to repurchase securities from investors with interest & pay up to $26M

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Embedded thumbnail for Investment & Economic Strategy Update: April 25, 2018

Investment & Economic Strategy Update: April 25, 2018

April 25, 2018
  • Economy is still healthy and we expect it will grow 2.5-3% GDP
  • Overall, equity markets are up, while Treasury Bonds are negative YTD
  • We expect this normal volatility to continue through 2018
  • We see signs of more stabilization and potential growth as we head towards 2019
Embedded thumbnail for Question: "Dividend Yield & High-Income as Portfolio Saving Investments?"

Question: "Dividend Yield & High-Income as Portfolio Saving Investments?"

April 25, 2018
  • RWM is negative on oil and other MLPs
  • MLPs pushed by brokerage firms for their yields
  • Valuations are high, share prices have dropped these MLPs 50-80% in value & dividends have been cut
  • Don’t chase dividend yield and high-income investments as Portfolio Saviors

Wells Fargo Fined $1 Billion Over Mistreatment of Consumers

  • Fed cited a pattern of abuses and lapses
  • Firm tries to resolve a year & a half of scandals across its operations
  • Wells Fargo still faces scrutiny with the DOJ & SEC examining the wealth management unit
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SEC’s Proposal to Protect Investors Isn’t All That Helpful

  • SEC passed a proposal that would regulate the way broker-dealers provide financial advice

  • Critics believe that the proposal is a step in the right direction, but the agency has a long way to go before any investors are truly safe from conflicts

  • Anything short of the fiduciary standard is an insult to American workers and families” SEC Commissioner, Kara Stein

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