Discount brokerages like Charles Schwab and E*Trade can compete with the full-service players on value and price, but a foray into the advice segment will be key, says Morgan Stanley analyst Michael Cyprys. Cyprys just recently started covering the brokers, including Charles Schwab, TD Ameritrade, E*Trade and LPL Financial, according to Benzinga.com. (All of these firms have a leg in the advice space in some form or another.) A shift to advice would give discount brokers access to a $22 trillion wealth pool, driving industry revenues to $36 billion. Cyprys expects the industry’s $4.1 trillion in discretionary managed accounts to grow to $7 trillion by 2019.
A new research report by the Insured Retirement Institute finds that a significant portion of retirees with at least $50,000 of savings receive those savings from a pension. However, less than a quarter (24 percent) of current private-sector workers are covered by a defined benefit plan. Among current retirees, more than eight in 10 are receiving some income from a pension, with 42 percent receiving at least half of their retirement income from pensions. However, as many as 56 million baby boomers will not receive retirement income from a pension, and will need $400,000 to make up for this shortfall. "Replacing pensions and achieving the financial security these plans provide to retirees will be a key issue for future generations,” IRI President and CEO Cathy Weatherford said.
Vanare announced that it is integrating with TD Ameritrade’s automated portfolio-rebalancing technology, iRebal. The integration will add iRebal’s rebalancing, cash management and tax-loss harvesting capabilities to Vanare’s online account opening program, Spark, and its white-label robo advisor, NestEgg. Vanare says the enhancements create a single wealth management platform advisors can use to service both digital and traditional clients. Rich Cancro, the founder and CEO of Vanare, said the integration with iRebal “helps our institutional clients remove the anxiety about serving traditional and robo clients efficiently and builds confidence from being prepared for intergenerational wealth transfer.”