Each week, Advice Wars highlights the best and worst events in the financial advice industry.
The Good
The current state of the financial advice industry would make Lloyd Dobler sick. It seems like everyone is being bought and sold or merged with another. According to data from Fidelity’s “Wealth Management M&A Transactions” report, M&A activity is hotter than ever before. The January 2020 report states:
“After a record year for wealth management M&A in 2019, January 2020 suggests that the torrid pace of transaction activity will continue. Thirteen RIA transactions were announced (+18% from January 2019), representing a sizeable $18.9B in client assets (+372% from January 2019). If activity continues at this rate, the year is on track for setting another record.”
The latest edition of Barron’s annual mutual fund family rankings is out and congratulations to MFS Investment Management for earning top honors for 2019. MFS, which ranked 12 in 2018, bested Virtus Investment Partners (#2 overall), DWS Group (#3 overall), Columbia Threadneedle Investments (#4) and Principal Global Investors (#5) to top this year’s list.
Natixis notched the biggest year-over-year jump (up to #11 in 2019 from #57 in 2018) while American Funds saw the biggest slide (falling from #1 in 2018 to #53 in 2019). Dive into the 2019 rankings here.*
The Bad
Move over hoodies and flip-flops, the new face of cybercrime wears a military uniform. This week the Department of Justice charged four, military-backed hackers from China with the largest identity theft in American history. The 2017 malware attack on credit reporting agency Equifax potentially exposed roughly 145 million Americans birth dates, Social Security numbers and other personally identifiable information.
To learn more about the who, what, why and how of this attack, I encourage you to read “How 4 Chinese Hackers Allegedly Took Down Equifax” from Brian Barrett at Wired.com.
Unfortunately, Equifax is likely just the first of many companies who will fall victim. Train your people, protect your passwords and leverage identity protection services. The latter aren’t perfect, but don’t cost too much and it could never hurt to have some backup should the worst happen.
The Ugly
As the saying goes, while a global health crisis strikes fear and anxiety in some, others see it as an opportunity…to prey on the misinformed. This week the SEC warned investors to be wary of any “news stories” promoting companies who could “skyrocket” by selling cures and preventative supplies for the coronavirus. Yes, providers need to step up and take responsibility for what’s showing up on their platform (looking at you Facebook). But, I hope trading platforms and the financial advice industry can create and implement fail-safe measures to protect people from themselves.
Speaking of the coronavirus. Lauren Gardner from Johns Hopkins University has compiled this fascinating real-time tracking map. China is clearly ground zero for confirmed cases of the virus but who is second you ask? Here’s a hint: It’s not a country, it’s a cruise ship. With over 540 confirmed cases, those poor people held captive on the “Diamond Princess” rank second in the world – more than all other countries combined! Anyone want to take a cruise?
Full Links
IMDB.com Lloyd Dobler quotes from Say Anything
Youtube.com “Say Anything Career Plans”
“Wealth Management M&A Transactions” Report from Fidelity (January 2020)
Barron’s Top Fund Families of 2019*
*Barron’s subscription required
Chinese Military Hackers Charged in Equifax Breach
How 4 Chinese Hackers Allegedly Took Down Equifax
Look Out for Coronavirus-Related Investment Scams - Investor Alert
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