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Clients Think "Goals-Based Investing" Equals Performance

Investors aren't sure what "goals-based" investing means, asset managers can't turn data into sales and a study funds that the UHNW hide 25 percent of their wealth.

Many advisors use a goals-based investing approach, where success involves progress towards a specific life goal, such as funding retirement. And while 94 percent of ultra high net worth investors believe their financial advisors use a goals-based approach, these investors are confused about what that approach entails. A recent survey by SEI found that over half (56 percent) of advisor-exclusive investors define goals-based investing as a measure of performance. "There is a strong disconnect between consumers' intended investment purpose and their understanding of how to achieve those goals over the long-term," said Jeff Ladouceur, director of SEI Private Wealth Management. "If investors do not understand goals-based investing themselves, how can they be sure their financial advisors are using that approach when managing their wealth?" To conduct the study, SEI surveyed 300 UHNW individuals.

Predictive Analytics the Future For Asset Managers

Asset managers love to collect and manipulate data, but they’re apparently not so great at putting those numbers to practical use when it comes to selling products. The reason? Intimidation. According to a recent study by Cerulli, distribution teams’ ability to use predictive data to increase the focus and efficiency of their sales efforts will be a key differentiator for asset managers in the future. However, according to Emily Sweet, senior analyst at Cerulli "One-third of national sales managers consider building predictive analytics to uncover sales opportunities as a major challenge, while 60 percent consider it a moderate challenge," explains Sweet. "Firms put much well-intentioned effort into collecting and manipulating data, but it often will sit dormant without the ability to turn it into actionable sales directives.”

The Ultra-Rich Are Hiding 25 Percent of Their Wealth

A new study has determined that the top 0.01 percent of the wealthy in Scandinavia hide 25 percent or more of their money from tax collectors. Researchers believe the rate will likely be higher among the super wealthy in other countries like the United States. Taking data from HSBC Private Bank, the Panama Papers and Norwegian, Danish and Swedish tax authorities, the authors of the study wrote: “The many data sets used in this article all paint the same picture: the probability to hide assets rises very sharply with wealth, including within the very top groups." The authors, University of California Berkley economist Gabriel Zucman and Scandinavian colleagues Anette Altstadsaeter and Niels Johannesen, found that it's not just individuals, but also corporations that are engaging in practices to shield wealth from taxation.

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