The bond between a professional advisor and his clients is not easily broken. In fact, most consumers would rather give up their smartphone, favorite dessert or coffee to keep their relationship with their advisor, according to a new LIMRA survey. Seventy-six percent of consumers said even a lifetime of good parking spots couldn’t keep them from their advisor, which LIMRA defines as a paid financial professional used to make at least some household investment decisions. The only relationship consumers would not give up for their advisor is with their primary care physician.
A report commissioned by the Ontario Securities Commission is giving ammunition to regulators in that country that may soon end commission-based compensation for financial advisors. “All forms of adviser (sic) compensation affect advice and outcomes for investors,” the report said; investors were pushed into riskier funds and decisions are biased towards the choices that paid higher commissions to the advisor. But the report also found “while fee-based compensation is likely a better alternative, there is not enough evidence to state with certainty that it will lead to better long-term outcomes for investors.” Canadian regulators are expected to make a decision on a commission ban in 2016.
Advisors looking for new ways to grow client assets may want to consider an index that focuses solely on cybersecurity service providers. Valuewalk highlights a new ETF based on the index, the PureFunds ISE Cyber Security ETF (HACK), which is up 29 percent since its November inception. That compares to the S&P 500, up 2 percent over that time. In light of the 3,500 data breaches in April and a Goldman Sachs report that found that 60 percent major companies plan to increase their cybersecurity budgets, some analysts think cybersecurity stocks may be the exception to a slowdown in stock market growth.