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Pandemic investing: 'Using my part-time pay to invest in stocks' – BBC News

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Richard Jones

Richard Jones, 18, has spent much of the past year working at Home Bargains. The rest of the time, he’s been investing in stocks.

The A-level student is among the thousands of people who’ve got involved via online share-trading platforms during the Covid pandemic.

But, while social media is awash with those flashing the trappings of trades and boasting of vast earnings, consumer groups and experts warn of the less “instagrammable” risks.

Richard, from Penrhyn Bay, Conwy county, said it had certainly been a “rollercoaster”.

“In January, I was getting quite bored during lockdown and I needed something new to get into, and I wanted to find a way of making my money work for me,” said Richard.

“I was up quite a bit at one point, then down quite a lot. Now I suppose I’m up £400,” he said.

Online brokers such as Charles Schwab, TD Ameritrade, Etrade and Robinhood have seen millions of new accounts opened during the pandemic, particularly when fear stalked the markets and prices dropped in March 2020.

The emergence of online share-trading apps, where users can buy shares or fractions of shares on their mobile phones for low fees, has driven this new wave of interest.

GameStop shop

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“I saw quite a lot of videos on investing on TikTok and YouTube and it sort of got me into it,” said Richard. “I decided to just watch more and more videos and teach myself about it to see what to put my money into.”

He has put in £3,000 from a trust fund, previous savings and cash he has put by while working part-time at Home Bargains before he heads off to study politics at the University of York.

The influx of amateur investors hit the headlines earlier this year, during high-profile clashes over several so-called “meme” stocks.

These involved major hedge funds battling with retail investors swapping tips on social media sites such as Reddit or Twitter and driving up prices on stocks for companies including GameStop and AMC.

‘Mistakes are not instagrammable’

Gary Power, of investment company Charles Stanley, said the Cardiff office where he worked had seen roughly double the usual number of young students getting in touch in connection with work experience since March 2020.

“It’s increased because of what we’ve seen – the fact that it is now front-page news,” he said, adding that client enquiries about investing had also risen.

However, he urged anyone thinking about investing their own money not to be seduced by the image of massive rewards with low risks.

“You could argue that some smaller retail investors might have shot the lights out [in the last year] but many others would have found themselves in very difficult situations.

“And generally, people will not own up to their mistakes – that is not instagrammable.”

Others have warned that online discussion forums and social media can put pressure on inexperienced investors and, for some, trading can become addictive.

‘I wouldn’t have known about trading if it wasn’t for Covid’

Nicola Knight

Nicola Knight

Nicola Knight, 41, a marketing manager and mother-of-three from Llantwit Fardre, Pontypridd, started investing in June 2020 and now counts herself among the thousands of UK day and swing traders – those carrying out several trades within one or a few days to take advantage of market movement.

“I would never have known about any of this if it wasn’t for Covid, because of the impact it had on pension funds in the stock market,” she said.

She started with an investment of £2,000 and is currently about 1,500% up – although she said she had spent the first six months losing as much as she made while learning about the market.

“For me, trading is a purpose to get a cash flow that is coming in as supplemental income. So, we live our normal lifestyle from our normal income and then any money we get from trading goes into a separate pot.

“Ideally, I want to buy properties at auction or in cash so that there’s no mortgage on them, which will be for our retirement.”

Nicola said interest in investing had grown massively in the last 16 months, with a Facebook group she helped to run for investors in penny stocks – those worth less than $5 (about £3.60) a share – now having more than 7,500 members.

However, she said due diligence and strategy were key.

“I try to tell everyone in my network, ‘please, please don’t buy stock if you know nothing about it. Just because somebody has mentioned something, don’t buy it’.”

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What to consider if you’re thinking about investing?

Guy Anker of Moneysavingexpert.com

Guy Anker, deputy editor of the Money Saving Expert website, said it had seen more inquiries from people about different kinds of investing as rates for traditional savings accounts had dropped even lower from a low base during the pandemic.

“If there’s one thing for you to consider when it comes to investing, it’s risk,” he said.

“Sometimes there’s potential to make lots of money, but you can lose some or all of your money, never lose sight of that. Make sure you only invest money you can afford to lose and do your research before going ahead with it.

He said it was important people considered what kind of investment, if any, might be right for them, as there were numerous options.

‘Not a way to make quick cash’

“A lot of people start out with funds. This is typically where a fund manager will run a fund of money for lots of people. They are going to spread that risk among lots of types of shares – maybe different commodities, maybe corporate bonds, gilts, shares, they could go into art – who knows?

“But funds are a good way to start because somebody else is doing a lot of the leg work for you.”

He said it was also important not to put all your eggs in one basket and to be aware that you cannot necessarily access your money as quickly and easily as with a savings account if it’s invested.

“Linked to that, it’s normally best to save for the long-term. Investing shouldn’t be seen as a way to make quick cash.”

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James Howells

James Howells

In 2013, James Howells had 7,500 Bitcoin on a hard drive – today they’re worth about £180m. The only problem is he mistakenly threw away the hard drive and has since been asking his local council for permission to search landfill. Earlier this year, he promised to donate 25% of the value of the digital currency to his home city of Newport in south Wales if he found the hard drive.

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Credit Suisse Nabs Truist's Wolfgram for Tech Investment Banking – BNN

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(Bloomberg) — Credit Suisse Group AG hired Rick Wolfgram as a managing director within its technology investment-banking group.

Wolfgram, who’s based in San Francisco, will report to Brian Gudofsky, the Swiss lender’s global head of technology investment banking, according to a memo to staff seen by Bloomberg News. A spokesman confirmed the memo’s contents, declining to comment further. 

Wolfgram was most recently a managing director at Truist Financial Corp., where he led internet and digital media investment banking. He’s worked on transactions including initial public offerings for Coursera Inc., DoubleVerify Holdings Inc., NerdWallet Inc., Udemy Inc. and Snap Inc., as well as a high-yield offering for Cars.com Inc., Gudofsky said in his memo. Wolfgram joined Truist in 2012 after working at ThinkEquity. 

Earlier this month, David Miller, Credit Suisse’s global head of investment banking and capital markets, said the Zurich-based firm plans to hire roughly 40 managing directors as part of its broader effort to rebuild. 

©2022 Bloomberg L.P.

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As Markets Tumble, Financial Advisors Rethink Growth Prospects, Finds Natixis Investment Managers 2022 Survey of Financial Professionals

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  • Canadian financial advisors look for double-digit growth in their business, primarily driven by new assets from new clients.
  • Vast majority of client assets are now in model portfolios as focus of wealth management business transitions from portfolio management to holistic financial planning.
  • Advisors see generational wealth transfer as crucial to business success, but only one-third prioritize next-generation heirs as new business targets.

 

BOSTON–(BUSINESS WIRE)–Financial advisors are looking to increase client assets under management (AUM) by 5% (median) this year, and with little of that likely to come from market performance, they are counting primarily on new assets from new clients to grow their business, according to findings from Natixis Investment Managers (IM) 2022 Survey of Financial Professionals, published today.

 

Natixis IM surveyed 150 financial advisors across Canada, as part of a larger global survey of 2,700 financial professionals. The Canadian findings presented here provide insight about advisors’ growth strategies, the challenges they face, and how they are adapting their business to changes in the market.

Over the next three years, financial advisors are targeting a median annualized growth rate in AUM of 15% and 10 new clients per year. While the long bull market helped turbo charge asset growth over the past ten years, advisors aren’t counting on double-digit returns over the long term. Rather, the survey suggests that advisors are looking to catch a tailwind from the vast amount of money in motion, including rollover retirement assets and the transfer of significant generational wealth. Many may be hard-pressed to hit their targets unless they also adapt their business practices and assumptions.

The survey found:

  • Client acquisition is the most difficult way for advisors to go about growing their business. When asked which business growth strategy is most challenging, they were two times more likely to say winning new assets from new clients (45%) than gaining more assets from existing clients (20%). Nearly one in three (29%) say retaining clients is most challenging.
  • 65% of advisors say that establishing relationships with clients’ next-generation heirs is the most important factor for the growth of their business, yet 50% say it’s difficult to make progress at it since it takes so much time.
  • 59% say that demonstrating their value beyond portfolio construction is one of the most important factors for their success, but 42% say it’s challenging because of the time needed to deliver a broader range of advice and services.

“Advisors have to expand their capacity to grow their business while meeting the needs of new and existing clients,” said David Giunta, President and Chief Executive Officer for the U.S. at Natixis Investment Managers. “Advisory relationships are no longer defined by transactions in an investment portfolio, but rather by a deeper understanding of clients’ financial needs and the services they feel add the most value for the money. Technology and product innovation are helping advisors deliver the consistent investment experience clients expect while supporting the transition of their business to a broader focus on financial planning.”

Modeling the business for new clients

One key way advisors are expanding their capacity on the planning side is by using model portfolios on the investing side. On average, 84% of client assets under management are in model portfolios, including 47% of assets in models that advisors build themselves, 29% in models built and managed by their firm, and 23% from third-party asset managers.

The survey found:

  • 83% of financial advisors find that financial planning services are what clients whose assets are in model portfolios value most about the relationship, followed by tax management (60%), financial education and engagement with family members (51%), and trust and estate planning services (50%).
  • Among the small percentage (16%) of advisors who don’t use model portfolios, half (54%) say that personally building clients’ investment portfolios is essential to their value proposition.

“The actively-managed, risk-adjusted performance features inherent in model portfolios make them particularly compelling in the current market environment,” said Marina Gross, Co-Head of Natixis Investment Managers Solutions. “Our portfolio consulting practice shows that core moderate-risk model portfolios consistently deliver higher risk-adjusted returns with less volatility than the broad market, enabling advisors to focus more time on long-term goals, than short-term performance.”

The survey found the most effective ways financial advisors are incorporating model portfolios into their practice are by:

  • Transitioning assets on a case-by-case basis, depending on each client’s willingness (65%)
  • Focusing on new assets from new clients (39%)
  • Transitioning client assets in phases, eventually moving the entire client base into model portfolios over time (34%)

About one in three advisors (29%) have found it effective to focus their use of model portfolios on retirement drawdown clients, while one in four (25%) say it was best to take the plunge and move their entire book of business into model portfolios all at once. Few have found it particularly effective to reserve their use of model portfolios for clients who represent less revenue potential, including clients with lower balances (15%) and younger clients (12%).

Prospecting efforts come into focus

In their search for new clients, financial advisors are looking in all the usual places, with most (77%) considering the life stages of their prospects. Almost all advisors (98%) say that pre-retirees, or people between the ages of 50 and 60, are their top priority, while 64% focus on prospects who are at or just entering retirement. Seven in ten (70%) prioritize older accumulators, or people between the ages of 35 and 50 who are in their peak earning years and likely in need of comprehensive financial services to address multiple financial goals such as saving for retirement, funding education, and managing debt.

Given the market environment and generational transfer of wealth underway, advisors may be missing opportunities to reach the oldest and youngest group of potential clients.

  • Only 33% of financial advisors are focused on post-retirees, many of who are drawing down versus accumulating assets but who still need robust financial planning and advice to protect, use and pass on their assets.
  • 34% place a high priority on prospecting for clients between the ages of 18 and 35, members of Generations Y and Z, who represent the fastest-growing segments of Canada’s population1.

Beyond age segmentation, advisors are tailoring their business offering and business development strategies to appeal to specific high-valued groups. When asked which segments they are prioritizing for client acquisition and retention, the survey found that, again, advisors might be overlooking opportunities to meet the distinct needs of certain segments, namely women and the LGBT+ community. Moreover, relatively few are targeting next-generation heirs despite their importance to the success of their business.

The survey found:

  • 83% of advisors are focused on professionals, such as lawyers, doctors, and corporate executives and nearly as many (75%) are targeting business owners
  • 75% are focused on HENRYs (High Earners, Not Rich Yet)
  • 35% prioritize next-generation heirs
  • 29% are concentrating on the needs of women
  • 4% are focused on the LGBTQ community

Natixis Investment Manager’s global report on the findings of its 2022 survey of Financial Advisors can be found here.

1 Statistics Canada, Census of Population, 2021, reported in A generational portrait of Canada’s aging population from the 2021 Census, released April 27, 2022.

Methodology

Natixis Investment Managers surveyed 150 financial advisors across Canada, as part of a larger global survey of 2,700 financial professionals in 16 countries. Data were gathered in March and April 2022 by the research firm CoreData with additional analysis conducted by the Natixis Center for Investor Insights.

About the Natixis Center for Investor Insight

The Natixis Center for Investor Insight is a global research initiative focused on the critical issues shaping today’s investment landscape. The Center examines sentiment and behavior, market outlooks and trends, and risk perceptions of institutional investors, financial professionals and individuals around the world. Our goal is to fuel a more substantive discussion of issues with a 360° view of markets and insightful analysis of investment trends.

About Natixis Investment Managers

Natixis Investment Managers’ multi-affiliate approach connects clients to the independent thinking and focused expertise of more than 20 active managers. Ranked among the world’s largest asset managers1 with more than $1.3 trillion assets under management2 (€1.2 trillion), Natixis Investment Managers delivers a diverse range of solutions across asset classes, styles, and vehicles, including innovative environmental, social, and governance (ESG) strategies and products dedicated to advancing sustainable finance. The firm partners with clients in order to understand their unique needs and provide insights and investment solutions tailored to their long-term goals.

Headquartered in Paris and Boston, Natixis Investment Managers is part of the Global Financial Services division of Groupe BPCE, the second-largest banking group in France through the Banque Populaire and Caisse d’Epargne retail networks. Natixis Investment Managers’ affiliated investment management firms include AEW; AlphaSimplex Group; DNCA Investments;3 Dorval Asset Management; Flexstone Partners; Gateway Investment Advisers; Harris Associates; Investors Mutual Limited; Loomis, Sayles & Company; Mirova; MV Credit; Naxicap Partners; Ossiam; Ostrum Asset Management; Seeyond; Seventure Partners; Thematics Asset Management; Vauban Infrastructure Partners; Vaughan Nelson Investment Management; and WCM Investment Management. Additionally, investment solutions are offered through Natixis Investment Managers Solutions and Natixis Advisors, LLC. Not all offerings are available in all jurisdictions. For additional information, please visit Natixis Investment Managers’ website at im.natixis.com | LinkedIn: linkedin.com/company/natixis-investment-managers.

Natixis Investment Managers’ distribution and service groups include Natixis Distribution, LLC, a limited purpose broker-dealer and the distributor of various U.S. registered investment companies for which advisory services are provided by affiliated firms of Natixis Investment Managers, Natixis Investment Managers S.A. (Luxembourg), Natixis Investment Managers International (France), and their affiliated distribution and service entities in Europe and Asia.

1 Cerulli Quantitative Update: Global Markets 2021 ranked Natixis Investment Managers as the 15th largest asset manager in the world based on assets under management as of December 31, 2020.2 Assets under management (“AUM”) of current affiliated entities measured as of March 31, 2022 are $1,320.6 billion (€1,187.6 billion). AUM, as reported, may include notional assets, assets serviced, gross assets, assets of minority-owned affiliated entities and other types of non-regulatory AUM managed or serviced by firms affiliated with Natixis Investment Managers.3 A brand of DNCA Finance.

This material is provided for informational purposes only and should not be construed as investment advice. There can be no assurance that developments will transpire as forecasted.

The data shown represents the opinion of those surveyed, and may change based on market and other conditions. It should not be construed as investment advice.

All investing involves risk, including the risk of loss. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

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Guardian Capital acquires majority of Ontario investment counselling firm – Investment Executive

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The deal announced June 27 also expands the geographic footprint of Guardian’s private wealth segment, which currently has offices in Toronto, Calgary and Vancouver.

Once the deal closes, current Rae & Lipskie management will retain a 40% stake. “All employees are expected to stay,” the Guardian spokesperson said.

Chairman and CEO Ken Rae (who founded the firm as Kenneth Rae Investment Counsel Inc., in 1988) is selling his ownership stake to Guardian “but remaining in a leadership role for the foreseeable future,” the Guardian spokesperson said.

Rae began his career with Canada Permanent Trust in Toronto. In 1968, he moved to Waterloo and worked for Mutual Life and Dominion Life before founding Advantage Investment Counsel in 1985, which he sold.

President and chief operating officer Brian Lipskie (who began his career with Wood Gundy in 1985 before joining Ken Rae in 1989) will retain a “significant” ownership interest and continue to lead the business. A group of senior staff and portfolio managers will also acquire shares in the company.

Rae & Lipskie “is deeply embedded in the Kitchener/Waterloo community, so while the majority of their base is made up of private clients, it also includes foundation and endowments,” the spokesperson said.

Guardian is “always considering such opportunities, and as we learned of this opportunity regarding a business with the strong industry reputation of Rae & Lipskie, we reached out,” the spokesperson added.

“With leaders Brian Lipskie and Ken Rae interested in succession planning, they were highly amenable to the option to secure the future of their businesses by partnering with us.”

The transaction is expected to close in the third quarter.

With files from Melissa Shin

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