Financial advisors should fear not just the current iteration of robo advisors, but also what they could become, writes Russ Alan Prince for Forbes. He said that while robo advisors will surely expand their investment offerings to include alternatives like private equity funds, hedge fund and direct corporate investments, it's a shift to a more wealth-management model than an investment model that should keep advisors up at night. He writes that since much of wealth management is routine, artificial intelligence should be able to handle it. "By systematizing and being able to deliver a broad array of financial services and products, robo-wealth manager will be able to offer integrated solutions. Therefore, clients will benefit from the synergistic results of well-done wealth management," he wrote. And, if that's the case, look for fees to drop and lower revenue for advisors with many of them leaving the industry.
Big Bird Jumping in on Big Deals
The venture capitalist crowd has always included some crazy characters, but nothing can beat the newest shop on the block. Sesame Workshop, the non-profit behind the children’s television show that recently moved to HBO, announced Monday it would collaborate with venture capitalist Craig Shapiro’s Collaborative Fund to launch the Collab+Sesame Fund. The new $10 million fund aims to lend its support for startups focused on using technology to improve children’s health, educational opportunities, and overall development. The Collab+Sesame Fund plans to invest up to $1 million in each startup, as well as support portfolio companies in future financing.
Growth Of Non-Traditional Emerging-Market Strategies
Morningstar says there are now more than 300 funds in its diversified emerging-markets category. While traditional emerging-market strategies focus on large-cap stocks and favor the bigger emerging markets, Morningstar said nearly a quarter of these funds don’t fall into this classification. In a new research paper, Morningstar presented four new categories of non-traditional emerging-market strategies: geographically flexible offerings, small-/mid-cap funds, multi-asset offerings and frontier-markets funds. Morningstar added that while some of the newer funds deserve attention from investors, the traditional strategies make the most sense for the majority of investors.
New Dean for American College of Financial Services
The American College of Financial Services has named Dr. Michael Finke as its new dean and chief academic officer. Finke, a professor and director of Retirement Planning and Living in the Department of Personal Financial Planning at Texas Tech University, will begin his new roles this summer. He received a doctorate in consumer economics from The Ohio State University in 1998 and in finance from the University of Missouri in 2011. He also served as the director of graduate studies at the University of Missouri. He's known as a prolific author in financial planning journals and won a 2014 Montgomery Warschauer Award for his Journal of Financial Planning article with Dr. Wade Pfau questioning the 4 % rule. "What Dr. Finke offers – a commitment to world-class research and innovative ideas that solve practical problems in the financial planning profession – will be transformative for The American College," said College President and CEO Dr. Robert Johnson. "Whether he's working with companies to explore the best way to use financial products, speaking with professionals about developing better ways to provide value to clients, or coming up with new and better ways to explain concepts to students, Dr. Finke's primary goal has been to operate at the intersection of practice and academia, helping make financial planning a true profession."