Vanguard, a leading player in the fund industry, is expanding its services to cater to consumers seeking high-yield savings options. The company has recently introduced its Cash Plus Account to non-Vanguard customers, stating that it presents “an opportunity to offer a cash product the Vanguard way.” As of August, these cash accounts offer an attractive 4.7% Annual Percentage Yield (APY) and are backed by FDIC insurance of up to $2.5 million for joint accounts.

Setback for Morgan Stanley

In a recent court ruling, Morgan Stanley faces a potential setback regarding deferred compensation for its advisors. A group of advisors who left the firm filed a lawsuit to recover their deferred compensation, challenging the customary practice. The judge ordered the dispute to be settled through private arbitration, as Morgan Stanley had requested. However, the judge’s decision also suggested that deferred-compensation disputes could fall under the purview of the 50-year-old labor law known as Erisa, raising concerns for Morgan Stanley about the potential implications of future disputes.

Launching an ETF: A Step-by-Step Guide

Exchange-traded funds (ETFs) have gained widespread popularity among advisors due to their low fees, diversified exposures, and instant tradability. With ETF assets surpassing $6 trillion, many advisors are considering creating their own branded ETFs by converting separately managed accounts. Our guest columnist provides valuable guidance for advisors considering this move. The key recommendations include developing a comprehensive business plan, establishing strategic partnerships, and executing a well-planned marketing strategy to promote their funds effectively.

DOL Faces Criticism for Fiduciary Proposal

The Department of Labor’s latest fiduciary proposal, aimed at enhancing standards of conduct for advisors providing retirement advice, received significant criticism this week. During a House subcommittee hearing, a panel of witnesses expressed concerns about the initiative. The majority argued that the proposal could limit access to retirement advice and doubted its ability to withstand legal challenges. They pointed to the previous Obama-era proposal, which was struck down in court.

Hightower Expands with Acquisition of Capital Management Group

Chicago-based registered investment advisor Hightower has announced its acquisition of Capital Management Group of New York. With $3.3 billion in assets and two offices in the Empire State, the newly-acquired firm aligns with Hightower’s client-service approach. Founded in 1992 and previously affiliated with independent broker-dealer Equitable Advisors, Capital Management Group complements Hightower’s holistic planning services, which include estate and tax planning alongside investment management.

Envestnet CEO Steps Down Amid Challenges

Bill Crager, co-founder and CEO of wealth management technology company Envestnet, will be stepping down at the end of March. Crager will transition into a senior advisory role, while James Fox assumes the interim CEO position during the search for a permanent replacement. Envestnet has faced scrutiny regarding its performance, resulting in a 22% decrease in stock value over the past year. Activist investor Impactive Capital secured board seats in March 2020, expressing dissatisfaction with Envestnet’s management. Following this, the company implemented layoffs in September and lowered its revenue guidance in November.

Wishing you a fantastic weekend.

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