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Week’s Best: Americans’ Retirement Concerns Mount

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An array of factors, none bigger than inflation, has more Americans worrying about their ability to retire securely. According to a new survey from BlackRock, 37% of respondents said they didn’t think they were on track with their retirement planning, up from 32% last year. Nearly 90% of survey respondents indicated that inflation is driving their concern that they’ll run out of money, though just 34% say that inflation has led them to increase their savings rates.

In other most-read wealth management articles this week:

Russia-Ukraine war. Apart from the awful human toll of Russia’s war against Ukraine, the conflict has further agitated already choppy markets, contributing to higher interest rates, inflation, and disruptions to the supply chain, among other challenges, according to strategists with Columbia Threadneedle. They game out four potential scenarios for how the conflict could unfold, including a continuation of the status quo that sees persistent inflation for the foreseeable future, an escalation of hostilities by Russia, and a nightmare scenario where an emboldened China starts sending aid to Russia or even rekindling its own military conflicts.

Case for direct indexing. Advisors aren’t always quick to embrace new portfolio construction tools, but the ongoing shift away from high-cost mutual funds and stock picking in favor of ETFs demonstrates that changes do take hold. Our writer suggests that we might be nearing another inflection point as advisors are reeling from the market swoons of the first half of 2022 and could prove more receptive to direct-indexing tools that can ease rebalancing and help mitigate tax liabilities.

Inflation anxiety. With consumer prices soaring and the S&P 500 down significantly so far this year, it’s hard to argue that inflation hasn’t been a major drag on markets. But when will it peak, and how are advisors coping? We put those questions to a handful of advisors in this week’s Barron’s Advisor Big Q feature. Responses range from suggesting that the peak is almost here or even that it’s come and gone, to concerns that inflation could remain high for months. Investment strategies focus on value stocks, inflation-protected securities, and shortening the duration on fixed-income holdings.

Showing employees the door. Wealth management firms, like any other business, sometimes find themselves keeping employees who are poor producers or a bad fit with the company culture. Some of the reluctance to issue a pink slip comes from a fear of legal liability. We list five steps firms can take to ensure that they conduct a termination by the book. They include setting clear written expectations, documenting any and all performance issues, and involving legal counsel in the process.

Protecting “financial planners.” In the wealth management and advice world, there are a galaxy of terms that professionals use to describe themselves, which can sow confusion among investors about what services they actually provide. One group is looking to secure legal protection for one of the most common designations: financial planner. The Financial Planning Association is seeking to codify the term so that only individuals who have passed a yet-to-be-formulated set of criteria can hold themselves out as a financial planner. The group says the move is about promoting financial wellness to ensure that all “planners” are held to a high standard. 

Focus Financial Partners has used M&A to build a network of wealth management firms in the U.S. and abroad that now has some $350 billion in client assets. For this week’s Barron’s Advisor Q&A, we sat down with Rudy Adolf, Focus’ co-founder and CEO, who tells us his publicly traded company could boost its assets to $1 trillion in the not-so-distant future. He also details the value-added services that he says are attractive to potential partner firms and reveals a regret he has about 2020.

Have a great weekend. 

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