Wealth briefs: A weekly roundup of financial planning news

April 11, 2022 6:01 PM

Scroll down to catch up on all the bits of wealth management news that you might have missed this week.

Carson Group appoints former LPL exec to be its chief strategy officer

Carson Wealth Management Group building, CWM, provided by Carson Group.

Onetime LPL Financial Chief Investment Officer Burt White has joined independent wealth manager Carson Group as a managing partner and chief strategy officer joining the firm’s executive board and leading its strategic focus. ““I have said many times that the world’s greatest new superpower is its adaptability, and I haven’t seen a company rivaling Carson as more equipped to innovate, pioneer and deliver forward-thinking industry thought leadership at such a rapid pace,” White said in a statement. “We have an immense opportunity to elevate our industry-leading wealth management offering and heighten the Carson brand and platform into a place where top advisors come to listen, learn and partner.”

SEC Proposes rules on SPACs, shell companies and projections

In its latest move seeking to bolster public disclosure and investor protection, the SEC is proposing new rules and amendments relating to special purpose acquisition companies (SPACs), shell firms and private operators. Now open for public comment, the guidelines would require more disclosures about the sponsors, conflicts of interest and potential risks to the value of SPACs while clarifying any projections made by the firms and their target acquisitions. They would also alter the mandatory financial statements of private operating companies in transactions with shell firms to more closely resemble the registration statements for an IPO. “It’s important to consider the economic drivers of SPACs,” SEC Chair Gary Gensler said in a statement. “Functionally, the SPAC target IPO is being used as an alternative means to conduct an IPO. Thus, investors deserve the protections they receive from traditional IPOs, with respect to information asymmetries, fraud and conflicts, and when it comes to disclosure, marketing practices, gatekeepers and issuers."

Actuary association releases reports on race and insurance pricing

The Casualty Actuarial Society unveiled its second pair of reports as part of a group of four it has issued over the past month about the relationships between race and insurance pricing. “Understanding Potential Influences of Racial Bias on P&C Insurance” and “Defining Discrimination in Insurance” join prior reports “Methods for Quantifying Discriminatory Effects on Protected Classes in Insurance” and “Approaches to Address Racial Bias in Financial Services” in helping financial professionals identify, quantify and prevent racist practices in the industry. “These two new reports in our CAS Research Series on Race and Insurance Pricing continue to provide additional insight into industry discussions on this topic,” CEO Victor Carter-Bey said in a statement. “We hope with this series to serve as a thought leader and role model for other insurance organizations and corporations in promoting fairness and progress.”

Asset managers led by women and minorities more likely to employ diverse teams

Fund companies owned by women and minorities are at least three times more likely than firms primarily led by white men to hire investment teams displaying diversity, according to new research sponsored by the Knight Foundation. Out of nearly 1,100 U.S. firms covered by eVestment’s dataset in the study, just 204 asset managers, or 19%, provided demographic data about their ownership and workforces. At least 74% of “diverse-owned firms” have teams reflecting that diversity, while only 25% of companies without diversity in their ownership have women or minorities on their teams. Both historically excluded groups remain underrepresented in the asset management industry. “This study underscores a common theme running through our research on asset managers: We need much more transparency and better reporting to understand the state of firm diversity so that customers can make more informed decisions about who invests their money,” Ashley Zohn, vice president of Knight’s Learning and Impact program, said in a statement. “In the absence of more comprehensive data about diversity at asset management firms, these results show that ownership diversity is a strong indicator of investment team diversity.”

LPL integrates SMA strategies into largest centrally managed platform

LPL Financial advisors can now adapt separately managed account strategies into the firm’s Model Wealth Portfolios platform alongside their own models or those of third-party money managers. At $83 billion in assets under management, Model Wealth represents LPL’s largest corporate advisory platform. The integration enables the creation of a unified managed account on the platform. “With this latest enhancement to MWP, we continue to forge ahead in our journey to deliver the premier wealth management platform in the industry,” LPL Executive Vice President of Wealth Management Solutions Rob Pettman said in a statement. “Advisors gain access to SMA strategies with the efficiency of a UMA, offering greater choice and flexibility and the ability to design portfolios that are tailored to each individual client’s need.”

FINRA asks industry professionals and stakeholders to apply to committees

Sign outside offic eof Financial Industry Regulatory Authority

In a “special notice” issued by FINRA, the regulator is asking wealth management professionals and stakeholders to seek to join 12 advisory committees and eight ad hoc groups. Each advisory seat comes with a three-year term and the ability to serve an additional consecutive tenure of three more years. “We welcome and encourage industry professionals and other stakeholders to join a FINRA advisory committee, provide their expertise and insights, and help FINRA pursue our mission of protecting investors and ensuring market integrity,” Marcia Asquith, FINRA’s executive vice president of the board and external relations, said in a statement.

Former financial advisor ordered to pay over $530K under SEC judgment

The Securities and Exchange Commission flag flies in front of a building.

After a trial and a guilty verdict for violations of anti-fraud laws, the SEC obtained a final judgment on March 30 in its case against former financial advisor Richard G. Duncan, which will require him to pay disgorgement of $104,080 plus prejudgment interest of $14,716, and a civil penalty of $414,366. In August 2019, the regulator had accused Duncan, a 35-year industry veteran with tenures at LPL Financial and seven other firms, of omitting and misrepresenting material facts, failing to disclose conflicts of interest and a lack of investigation of a questionable investment scam originating in Turkey.

Cetera books ‘Win Ben Stein’s Money’ star for client event series

Economics commentator, actor and former game-show host Ben Stein will appear next month as part of independent wealth manager Cetera Financial Group’s “In the Room” series for clients and advisors. Cetera Chief Investment Officer Gene Goldman is going to host a discussion about inflation, economic uncertainty and long-term goals on May 19. “The Cetera team is thrilled to welcome Ben Stein to the virtual stage to hear his expertise on today’s economic and investing environment in what we know will be an engaging and witty observation,” Michael Zuna, Cetera’s chief marketing and communications officer, said in a statement.

Fidelity Investments’ institutional arm launched Fidelity Target Allocation Tax-Aware Model Portfolios

Fidelity unveiled nine equity and fixed income mixes — 10/90, 20/80, 30/70, 40/60, 50/50, 60/40, 70/30, 85/15, and 100/0. Each option has I and Z share classes. The portfolios are available through Fidelity’s managed account platform, Fidelity Managed Account XchangeSM (FMAX), and the Envestnet platform. Using a blend of actively managed funds from Fidelity and ETFs from other asset managers, portfolios seek to enhance total return through fund selection and help reduce the impact of taxes on returns. “We’re committed to providing choice and flexibility, and as the marketplace and investor preferences continue to evolve, we want to enable advisors to efficiently manage their clients’ investments in a customizable way that is tailored toward tax efficiency,” said Suzanne Daly, vice president of Model Portfolio Business Development, Fidelity Institutional.

Faith Investor Services and Capital Insight Partners create a faith-based ETF

The fund, with the ticker “PRAY,” is grounded in faith-based investing principles with a risk-managed strategy. All holdings have been “ethically screened in order to ensure their adherence to Biblical teachings by excluding companies that profit from abortion, as well as those that produce weapons of mass destruction, adult entertainment, gambling software, and alcohol and tobacco products,” Dallas-based FIS said in a statement. CIP, based in Scottsdale, Arizona, serves as sub-advisor.