Special report uncovers trends in how financial
advisors shifted client assets in 2023
Advyzon, a comprehensive service and technology platform and
portfolio management solution for financial advisors and investment
managers, has just released “What’s Going On With Assets in 2024?”,
Advyzon’s third annual asset allocation study that reveals new
trends in how financial advisors are investing client funds.
With deep dives into the subtle shifts around asset allocation,
the paper looks at how the more than 1,500 advisory firms that use
Advyzon for portfolio reporting allocated client funds at the close
of 2023. Authored by Kelly Fitzpatrick, Senior Product Owner at
Advyzon, the special report also takes a look at the evolution of
the equity and fixed income markets over the course of the past
five years, analyzes top holdings at the security level, and
provides insights on how advisors are utilizing alternative
investments.
Among the highlights from the latest study: Advisors once again
reduced their cash allocations in 2023, and the gap between ETFs
and mutual funds widened significantly last year, building on
findings from last year’s white paper that showed ETFs dethroning
mutual funds as the top investment vehicle for advisors.
Advyzon's cloud-based platform combines portfolio management,
customizable performance reporting, trading and rebalancing, client
web portals, client relationship management (CRM), client billing,
and document storage – plus a model marketplace with access to
third party strategists via turnkey asset management with Advyzon
Investment Management (AIM) – making it easy for advisors to run
their financial planning and investment advisory firms while
managing their client accounts with efficiency and ease. Advyzon
currently serves over 1,500 advisory firms. Data for this study was
pulled anonymously from all firms to protect client data.
CASH IS NO LONGER KING
One of the main findings of the 2024 study was that advisors
once again reduced their cash allocations in 2023. According to
Brian Huckstep, CFA, CFP®, Chief Investment Officer of AIM – a
turnkey asset management program (TAMP) under the Advyzon umbrella
– this makes sense in context.
“The end-of-year expectation in 2023 was that the Fed would
lower rates six times in 2024,” said Huckstep. “That may have
prompted some investors to preemptively exit cash and very
short-term bonds to seek better returns in longer-dated bonds or
other investments.”
On the other hand, this shift means some advisors may have
missed out on higher-than-average yields in short-term debt and
cash equivalents.
ETFS EXTEND THEIR LEAD
While ETFs dethroned mutual funds as the preferred investment
vehicle for investors at the close of 2022, the gap widened
significantly last year. Advisors had nearly 30% allocated to ETFs
at the end of 2023, compared to roughly 22% via mutual funds.
Huckstep flagged two important trends in ETFs. First, a rise in
“buffer ETFs” meant to minimize downside risk. These ETFs are
filling the role that structured notes once held. Second, “The ETFs
that have been rising in popularity are the lower-priced ones” –
with one exception: SPDR’s SPY. Huckstep pointed out that at 0.09%,
SPY’s price tag is triple that of Vanguard’s VTI or IVV. However,
since SPY debuted 31 years ago, investors may have decades worth of
capital gains that they don’t want to realize – even if switching
funds means lower fees going forward.
THREE TRENDS TO WATCH THE REMAINDER OF 2024
Huckstep also flagged three trends to watch for in the remainder
of this year:
- The yield curve and its potential to impact bank stocks
- The rising burden that corporate debt may put on equities
- How the election could impact investing overall
When it comes to the election, Kaitlin Hendrix, Asset Allocation
Research Director at Dimensional Fund Advisors – whose actively
managed funds are available via the AIM platform – suggests
advisors keep their clients focused on the long term: “Stocks have
rewarded disciplined investors for decades, through both Democratic
and Republican presidencies, as shareholders are investing in
companies that focus on serving their customers and growing their
businesses regardless of who is in the White House.”
The full report also reveals:
- How each of the main security types performed
- What the top holdings of 2023 were
- What trends industry experts are watching over the next
year
To read the full report and download the white paper, please
click here.
ABOUT ADVYZON AND ADVYZON INVESTMENT MANAGEMENT
Advyzon provides comprehensive, intuitive, cloud-based wealth
management technology and investment management services for
independent financial advisors and registered investment advisors
(RIAs). The Advyzon tech platform combines portfolio management,
customizable performance reporting, trading and rebalancing, client
web portals, client relationship management (CRM), client billing,
and document storage, along with investment management services and
a model marketplace offered by Advyzon Investment Management, LLC.
A team of entrepreneurs led by CEO Hailin Li, Ph.D., CFA®, Advyzon
strives to innovate in strategic and useful ways. Financial
advisors inspire Advyzon’s innovation and integrations. Their
exceptional technology and unmatched service exist to improve the
advisor experience – whether it’s via portfolio and firm management
or client relationships and growth. To learn more about Advyzon,
visit www.Advyzon.com. To learn more about Advyzon Investment
Management (AIM), visit www.AdvyzonIM.com.
DISCLOSURES
AIM is a registered investment adviser registered with the
United States Securities and Exchange Commission, and a wholly
owned subsidiary of yHLsoft Inc., doing business as Advyzon
("Advyzon"). All investment advisory services are provided by AIM,
while some technology and administrative support services are
provided by Advyzon. AIM's advisory services are available to
financial advisors for use in managing assets for their clients
only, and do not provide advisory services directly to retail
investors.
Opinions expressed are as of the current date; such opinions are
subject to change without notice. Advyzon and Advyzon Investment
Management shall not be responsible for any trading decisions,
damages, or other losses resulting from, or related to, the
information, data, analyses or opinions or their use. This
commentary is for informational purposes only. The information,
data, analyses, and opinions presented herein do not constitute
investment advice, are provided solely for informational purposes
and therefore are not an offer to buy or sell a security. Please
note that references to specific securities or other investment
options within this piece should not be considered an offer (as
defined by the Securities and Exchange Act) to purchase or sell
that specific investment or a recommendation for a particular
product.
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version on businesswire.com: https://www.businesswire.com/news/home/20240627426870/en/
Jonny Swift Impact Communications, Inc. 913-649-5009
JonnySwift@ImpactCommunications.org