Headlines you need to know this week

January 14, 2020

ESG plays a role in bank lending, study finds

A recent study by Fitch Ratings found that a company’s focus on environmental, social, and governance (ESG) issues plays a role in lending among global banks. Fitch polled 182 banking groups in 49 countries. The survey found that nearly half of the lending assets covered by the participating banks had been screened for ESG risks.

The family office of the future

The majority of ultra-high-net worth individuals would prefer to work with a multi-family office, compared with a wealth management firm, according to a 2017 study. Creating a single-family office can be expensive and complicated. A recent report looks at the concept of a virtual family office, which takes advantage of outsourcing and advances in technology to deliver customized services.

MSCI introduces bond indexes

MSCI, a global index provider, last week announced its first indexes for the fixed-income market. The 15 new corporate bond indexes include: an investment-grade index, two ESG corporate bond indexes, and 12 factor indexes.
January 7, 2020

Demand for advice may rise with volatility

Affluent investors are worried about the markets and the economy, according to a recent study. Optimism among high-net-worth investors fell to 55% in 2019 from 65% in 2018. Most high-net-worth investors (60%) and ultra-high-net-worth respondents (two thirds) said that market volatility will increase the likelihood that they will seek help from a financial advisor.

New SEC regulation to take effect in June

A new Securities and Exchange Commission (SEC) rule governing how brokers manage disclosures and conflicts of interest when recommending investments is slated to take effect in June 2020. The SEC approved the Regulation Best Interest in June 2019.

Investors wished they invested more

Looking back at 2019, a recent survey found that 70% of adults said they had some form of financial regret. The survey noted that 35% said they wished that they had invested more. In addition, 16% said they wish they had invested more aggressively and 12% said they wished they had acted more conservatively.
December 31, 2019

Millennials may face saving challenges

Retirement saving can be challenging for most savers. But there are some obstacles that may make it even harder for Millennials to save, according to a recent study. The research concluded that the top challenges for Millennials are: medical inflation, lack of a traditional pension, and increased life expectancy. A discussion of retirement preparedness should include these issues.

Many investors report low risk tolerance

Most adults are risk-adverse when it comes to investing, according to a recent poll. Less than half of those surveyed said they would accept some risk to boost returns. Nearly 30% reported an “extremely low risk tolerance” compared with 14% who cited a “high degree” of risk tolerance. Respondents working with a financial advisor had a higher level of risk tolerance on average, compared with those without an advisor.

Clients want frequent communication

Clients want more frequent and personalized communication from their advisors, a recent study found. The majority of respondents (75%) said they would like personalized updates with data and information specific to their investments. Most participants (79%) said they preferred email communication, while 29% cited text messages, 26% said newsletters, and 26% said they would like a face-to-face meeting for updates.
December 23, 2019

Investors need guidance on bonds

Most investors need help from a financial advisor to understand fixed-income investing, according to a recent survey. About 35% of respondents who do not work with an advisor reported that they understand bond investing, compared with 64% of investors who work with a financial advisor. Not surprisingly, 64% of advised investors reported that they have some investments in fixed income, compared with 25% of those who have not worked with an advisor.

Optimism about the stock market rises

Investor optimism about the stock market in the near-term reached its highest level this year in the recent AAII Sentiment Survey. A bullish sentiment — that stock prices will rise in the next six months — increased 6.5 percentage points. Expectations that stock prices will fall declined 5.6 percentage points. Neutral sentiment remained unchanged.

Millennial women face saving challenges

In addition to a gender pay gap, women may have more challenges than men in saving for retirement because of saving behavior. A recent study found that Millennial women, on average, defer 5% of income for retirement savings, compared with 8% for Millennial men. Another survey found that only 46% of Millennial women say they are confident in investing, and 63% of women ages 18 to 29 said “financial planning is too difficult.”
Wealth Management Center

Read our views on preserving and enhancing wealth for the future with financial-planning experts Bill Cass and Chris Hennessey

Putnam Perspectives

Explore our thinking about today’s financial markets

Advisor Tech Tips

Stay on top of trends in mobile technology, software, and social media