Is modern portfolio theory all bunk? - InvestmentNews

Simply put, most money managers are focused on outperforming their benchmarks without adding risk. And because risk is measured on a relative basis, a portfolio that moves up and down less than its benchmark is perceived as more risky on a relative basis because it is considered less correlated. But on an actual basis, a fund that gains 50% when a benchmark gains 100%, and then loses 25% when a benchmark loses 50% is less volatile.

The SEC: Outmanned, Outgunned, and On a Roll - Businessweek

The SEC has also settled lawsuits against J.P. Morgan Securities (JPM), Wachovia Capital Markets, and Goldman Sachs for misleading investors in securitized debt packages, such as collateralized debt obligations, during the financial crisis. It has been particularly attentive to Goldman Sachs. The SEC extracted a record $550 million settlement from the bank two years ago in a case involving a claim that the Wall Street firm had misled investors in a CDO on the eve of the financial crisis

Swimming In Shallow Water

The fastest growing segment of the advisor space, he says, is the hybrid advisor working as both a rep and as an RIA (or IAR). Studies by Tiburon Strategic Advisors and the Financial Services Institute have quoted CEOs of smaller firms bemoaning this trend, saying it is ruinous to the B-D model because advisors want huge payouts and they only give leftover securities business to their broker-dealers. But to those firms with scale, says Bruton, the hybrid model can be attractive. It lures advisors, allowing them to be nimble enough to offer different pricing models for different kinds of clients.

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Swimming In Shallow Water

She says the Genworth unit is a new specialty for the firm. “We do believe in that segment—a tax professional CPA is really in a great position to develop a broad holistic view of what their client needs. Well-educated and trained, they become great financial quarterbacks for their clients.” The Genworth tax business also had a higher penetration of fee-based relationships than other firms with this specialty, she says. Cetera deals with both commissions and fees, but the latter tend to strengthen bonds with clients, Brown says, especially higher-net-worth clients.