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Want to Outdo the S&P? Invest in Manhattan Real Estate

Luxury condos in Manhattan outpace the S&P, advisors are overconfident on multi-generational wealth transfer and Michael Mahoney moves from Morgan Stanley to Snowden Lane.

If clients are looking for a promising long-term investment, they may want to consider luxury residential real estate in New York City, which has experienced a 10-year compound annual growth rate of 7.4 percent per year, according to a new report from CityRealty.com, which tracks the performance of the top 100 condominiums in the city. That compares to the S&P 500, with a 10-year CAGR of 5 percent, and oil, at a 3.4 percent loss. CityRealty analyzes a building’s sales history, prominence and its own rating for the property to determine which buildings to include in its index. For the six months ending Sept. 30, the average price per square foot was $2,824, up 20 percent from the year-ago period. “Prices rose in part because of the dozens of closings recorded in the very expensive new development 432 Park Avenue, as well as continued high prices in properties such as 15 Central Park West and the Time Warner Center,” the report says.

Advisors Overconfident with NextGen Assets

Despite the challenges advisors face in reaching the next generation of clients, a survey from Cerulli Associates and Everplans found that most expect to continue managing at least part of their clients’ assets for multiple generations. Of 200 advisors surveyed, 90 percent believed they would continue to manage assets that pass on to a child, even though only 7 percent of clients’ children know the advisor. And even though 92 percent admit that they are un-acquainted or only quasi-acquainted with clients' grandchildren, half of advisors remain confident that those assets will stay. "What we have here is a case of wishful thinking," said Donnie Ethier, associate director, high-net-worth wealth management at Cerulli Associates. "Advisors today are under a tremendous amount of pressure – regulatory concerns, performance and returns, and just the general stress of running a business. These numbers should be a harsh reminder that while everyone is facing increased competition, it's important to maintain your relationships if you wish to continue to grow your AUM."

Morgan Stanley VP Joins Snowden Lane

Michael Mahoney, former vice president and financial advisor at Morgan Stanley, has left the wirehouse for Snowden Lane Partners, according to a press release from the RIA. Mahoney specializes in financial planning-based asset management as well as estate planning and wealth transfer for high-net-worth investors. He'll join Snowden Lane's $350 million VERITAS Private Wealth team as partner and managing director. “Mike brings with him more than 20 years of experience in wealth management where his success has been in ensuring the best outcome for his clients,” said Jesse Clinton, VERITAS partner and managing partner. Mahoney declined to disclose his assets under management.

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