These are the sectors investors love and hate right now

Credit Suisse quarterly take on the best and worst sectors as published at Bloomberg by Julie Verhage.

At times like these—when the overall market is flat and Wall Street in general doesn't expect the S&P 500 to move much higher through the end of the year—there's even greater interest in figuring out which stocks and sectors will outperform.

The team at Credit Suisse AG, led by Chief U.S. Equity Strategist Lori Calvasina, looked at which sectors have the most bullish and bearish consensus views from hedge funds, mutual funds, and sell-side analysts. It does this on a quarterly basis, and here are some of the takeaways from the current positioning compared to historical norms.

Here's a look at the "crowded" trades where all three camps are in agreement:

  • Underweight small cap retailers
  • Underweight small cap household and personal products
  • Underweight large cap materials
  • Overweight large cap banks
  • Overweight small cap semiconductor companies and semi equipment
  • Overweight small cap software and services

Underweight small cap retailers Underweight small cap household and personal products Underweight large cap materials Overweight large cap banks Overweight small cap semiconductor companies and semi equipment Overweight small cap software and services
Figuring out the bullish or bearish stances varied by investor group. For hedge funds, Credit Suisse looked at net exposure to indexes like the Russell 1000 and Russell 2000 as well as exchange-traded funds (ETFs). Compiling the mutual fund data required looking at the overweights relative to that fund's benchmark. Lastly, sell side data was determined by the net buy ratings.

However, don't start buying large overweights just yet. The team said that this heavy consensus sentiment has them a bit concerned. There's "extreme, potentially peaking bullishness across the board," they wrote of the large cap banks. When it comes to small cap semis and semi equipment they also observed "extreme bullishness in all camps, likely [a] peak among [hedge funds]." So even though banks have struggled in 2016 due to factors such as interest rates remaining lower for longer, it might not be time to buy.

To be the contrarian, look at a potential bottom in small cap retail where they say the positioning "supports our mid-April upgrade to market weight, but there may still be some risk of unwinding in large caps."

Originally published by Julie Verhage at Bloomberg.

Market Connectivity as a Service?

Lucera Financial Infrastructure and Perseus have teamed to create an on-demand Software Defined Network that allows financial traders to tap into market connectivity on an as-needed basis.

Dr. Jock Percy, Perseus Telecom

Dr. Jock Percy, Perseus Telecom

“You don’t need to own to infrastructure or the heavy assets, now you can buy it by the drink,” Perseus CEO Jock Percy told Markets Media. “This is the ‘uberization’ of capital markets connectivity,” he said, referring to the ubiquitous transportation network.

Using the network’s Software as a Service (SaaS) model, Percy said once a customer is on-boarded, he or she can log on via a secure-access portal and connect as they wish, 24 hours a day 7 days a week. This contrasts with legacy connectivity, which entails procuring, setting up and plugging in racks, servers and other physical equipment.

Billed as the first on-demand SDN exclusively for the capital markets industry, the network provides traders with cross-connection points encompassing more than 246 counterparties and 53 co-location centers across 24 cities, 15 countries and six continents. It combines Perseus’s low-latency, global, fiber network with Lucera’s SDN, compacting go-to-market network implementation cycles to no more than two days, or 45 times faster than the industry standard of 90 days.

“Forget about dealing with bandwidth and expensive hardware – a thing of the past,” Lucera CEO Jacob Loveless said in a release. “By creating the world’s largest SDN and devoting it exclusively to the financial markets, we’re game-changing the culture of connectivity that the industry hasn’t seen since the extranet arrived on The Street.”

Jake Loveless, Lucera

Jake Loveless, Lucera

“Perseus is the ideal partner to make this happen with their unrivaled speed and Points of Presence touching every major financial center across the developed and emerging world,” Loveless continued. “By being faster and more flexible than traditional service providers, SDNs now allow traders to connect to new markets on a customized, pay-as-you go basis.”



Originally published by  at Markets Media.

Inside the Nondescript Building where trillions trade each day

Inside the Nondescript Building where trillions trade each day.

Equinix's NY4 data center hosts 49 exchanges among the customers that have set up servers in the Secaucus, New Jersey, facility.

Six miles northwest of the New York Stock Exchange as the microwave flies, across the Hudson River and within earshot of Interstate 95, is a building with no name. Only three numbers mark its address, and, like much of its surroundings, it’s nondescript, encircled by windblown trash and lonely semitrailers waiting to be hauled away somewhere. It’s a part of New Jersey that’s, well, ugly.

It’s also a critical node in the U.S. financial system: The 49 different exchanges that lease space at this data center sent a record 9.6 million messages per second through its fiber-optic cables in February. Every day, electronic trades representing trillions of dollars’ worth of equities, derivatives, currencies, and fixed-income assets pass under this roof. This is NY4. This is where Wall Street actually transacts.

Servers in cages at NY4
Servers in cages at NY4. Photographer: Christopher Payne

It’s just one of the crown jewels ofEquinix, the $22.2 billion company that’s quietly grown into the world’s largest owner of interconnected data centers. To give you an idea of Equinix’s lead in the space, you would have to add up the market value of its five closest U.S. competitors to roughly equal its market cap, according to data compiled by Bloomberg.

Equinix pitches its centers as more than just storage space for servers. Its clients pay in part because of who else is there. That includes the Chicago Board Options Exchange, Bats, ICAP, Nasdaq, the NYSE, and Bloomberg LP, the parent company of Bloomberg News. IEX Group, the firm that starred in Michael Lewis’s 2014 book Flash Boys, stashes a key piece of its hardware in one of Equinix’s New Jersey data centers: a coil of fiber-optic cable that slows orders down by a fraction of a second. And those firms are just from the handful of financial industry customers Equinix discloses. It connects more than 6,300 businesses to their customers, and most of those firms don’t want it known that they lease one of NY4’s metal cages, which are identified only by numbers, not names.

Equinix’s nonfinancial clients, meanwhile, include some of the Internet’s biggest names:, AT&T, China Mobile, Comcast, Facebook, Hulu, LinkedIn, Microsoft, Netflix, Pandora, and Verizon. Much of the Internet is literally run through the nondescript buildings Equinix has scattered around the world. “They’re a crucial component of how the cloud works,” says Colby Synesael, an analyst at Cowen & Co. who covers Equinix. “It’s where the Internet lives.”

The security at NY4 bears this out. To get from the parking lot to a spot where you could touch one of the servers you’d have to go through five checkpoints. One of them is a so-called man trap with two automatic steel doors that never open at the same time. Your palm print is required twice in addition to your PIN code. A wall of video monitors captures every nook and cranny of the 338,000-square-foot building.

Once you’re in, the space is enveloped by a rush of white noise from the thousands of computer fans whirring away to keep the servers cool. To help maintain the temperature, the ceiling is 45 feet high, roughly four stories up. It’s barely visible—not just because of its height, but also thanks to all of the suspended trays of cables and cooling ducts running overhead. All this goes toward one statistic: Equinix says in its annual filing that it kept its facilities up and running 99.9999 percent of the time in 2015.

The 12 air-handling units in NY4 move cold air via overhead ducts.
The 12 air-handling units in NY4 move cold air via overhead ducts. Photographer: Christopher Payne.
They’re big on backups. In case of a power failure, NY4’s uninterrupted power supply room has 5,600 batteries on standby to provide eight minutes of electricity while the generators rev to life. Should the air conditioning fail and risk the servers overheating, there are three 150,000-gallon tanks filled with water chilled to 45F. Running that cold water through pipes would give NY4 staff 20 minutes to get the AC fixed. Oh, and the generators: 18 of them, each the size of a locomotive engine and able to crank out 2.5 megawatts of power. Equinix keeps 180,000 gallons of diesel fuel on-site to run them. In terms of footprint, NY4 is roughly the same size as a Manhattan block. If you want to look out the window, too bad. There isn’t one.
There’s a slick appearance to it all, from the red-lit foyer to the metal all around and the blue lights that shine from above. This last feature comes in handy at night for security purposes, but it’s also got an aesthetic touch to it. “When everything is dark and you only have these blue lights, it looks really cool,” says Michael Poleshuk, senior director of operations for Equinix in the northeast region, as he leads a tour.
Another reason the location is important to Wall Street is because NY4 is only one part of Equinix’s Secaucus, N.J., campus. The company has spent the last 20 years growing and consolidating the industry into its own spider web of interconnected data centers from Frankfurt to Tokyo to London to Rio de Janeiro to Sydney. This is the company that controls a significant part of modern finance: the sites where you plug in the actual computers that fuel today’s hyperfast and hyperconnected electronic trading.
“I call them the 800-pound gorilla of the data services market,” says Inder Singh, an analyst at SunTrust Robinson Humphrey. “I see these guys as a key bridge between customers and suppliers.”
The neutrality Equinix has established by not competing with its customers is also important, Singh says. “It is the Switzerland of data center players,” he says. That has a downside, though. “Equinix definitely leaves some money on the table. But they would probably be losing some of their coveted customers.”

Equinix provides only “dark fiber”; it doesn’t move data itself. That’s created opportunities for other companies. A startup called Lucera is one of them. The company operates something like a telecom within the data center by using software to interconnect the banks, exchanges, and investment firms that have servers at NY4.

“If Goldman Sachs wants to connect to 100 people, they just run one cable to us,” says Jacob Loveless, Lucera’s co-founder and chief executive officer. In turn, that one cable from a firm can then connect the client to any of the other 52 data centers around the world where Lucera operates.

The larger idea Loveless and his partner Peter Durkan hit on is moving Wall Street onto the cloud with shared infrastructure. After 10 years at Cantor Fitzgerald, where he was the firm’s head of high-frequency trading, Loveless realized there were too many trades out in the world that were great ideas but impractical: Implementing them would take six months and $500,000 because of the connections that needed to be made to another bank or investor or exchange that might be halfway around the world.

It would take a bank about three months to create a new connection to another bank if it did it on its own, Loveless says. Lucera’s fastest time to connect two of its users is eight seconds. That’s because the company is software-based and relies on hard-wired connections already created by Equinix. Lucera’s mean connection time is only two hours, Loveless says.

Standby power comes from 18 generators that can crank out 2.5 megawatts each
Standby power comes from 18 generators that can crank out 2.5 megawatts each. Photographer: Christopher Payne

NY4 and other data centers like it make this a reality, but it wasn’t always this way. At the dawn of electronic trading in the 1980s, major banks such as Goldman Sachs or Bank of America had to lay wire and cable to create their own networks to connect to customers. If you laid one bank network atop the other, they would have all been basically the same, Loveless explains, which is another way of saying it was hugely inefficient. Then in 2000, a company called Radianz set out to create a global network that promised access to the major financial institutions through a single connection.

It worked. British Telecom bought Radianz in 2005 for about $130 million. Lucera, which got its start in 2013, is now a sort of second-generation Radianz as it offers to handle the complicated interconnections within a data center like NY4 for its clients.

“If I’m a customer and I want to connect to 270 companies, I can either run 540 connections out of my own cage or they can run a pair to us and we’ll run the rest,” says Michael Badrov, global head of operations for Lucera. As he spoke in the firm’s cage at NY4, three workers were busy doubling Lucera’s capacity to take on more customers.

On the roof of NY4 on a rainy February morning, the skyscrapers of Manhattan could just be seen to the east. To the west, planes lined up to land at Newark airport. Microwave antennas that look like satellite-TV receivers are pointed toward Chicago, Newark, and north of the city where the signal can get hooked into the fiber-optic cable that ends in London. That’s where Equinix’s LD4 center is located.

This global network of densely packed data centers is now the reason you can trade a stock on your smartphone in a way that was unimaginable 10 years ago. The six or seven intermediaries needed—AT&T, your brokerage, the NYSE, and so forth—are all housed under Equinix’s enormous roof.

John Knuff, Equinix’s general manager for financial services, looks at this dense cohabitation and sees the future. “I always say, keep your customers close,” he says. “But keep your vendors even closer.”

Originally published on Bloomberg by Matthew Leising and Annie Massa.

Political risk map 2016

Aon plc (NYSE:AON), a leading global provider of risk management, insurance and reinsurance brokerage, powered by Roubini Global Economics produced its 2016 Political Risk Map with the additional ability to predict the future financial strength of global economies, which reflect a country’s ability to repay its sovereign debts.

The report is now freely accessible through AON's new, dedicated online portal, enabling those interested in the topic to examine past, current and future trends in global political risk.

The map examines political risk in 162 emerging economies, considering risks through nine risk icons (six in the print version), namely: exchange transfer, sovereign non-payment, political interference, supply chain disruption, legal & regulatory risk, political violence, risk of doing business, banking sector vulnerability and inability of government to provide stimulus.

The online portal allows users to drill into specific risks, territories and time periods, providing a comprehensive tool for those interested in understanding the impact of political risks on the global economy.

This year the map has the additional ability to predict the future financial strength of global economies using Roubini's Shadow Credit Rating scores, which reflect a country's ability to repay its sovereign debts.

An Improving Outlook

For the first time in three years, improvements in the political risk landscape far outweighed deteriorations. In fact, in 2016 the Political Risk Map counted eight upgrades, against half that many downgrades.

A slowing China and weaker commodity prices are responsible for increased political risk in both Sub-Saharan Africa and Latin America, although there is cause for cautious optimism in Argentina and Cuba.

In the Middle East and North Africa the oil drag deepens and continues to threaten domestic stability, heightening risk in the region. While in Asia Pacific, anti-corruption campaigns have helped to strengthen economic resilience and reduce political risk.

Why Popular Investments Are Usually Wrong

Why popular investments are usually wrong

(Wealth Management) Oscar Wilde, the 19th century poet and playwright, once said: "Everything popular is wrong."  The Irish wordsmith wasn't referring to the financial markets, but he may as well have been. That's because investors should be very wary of the popular stocks, sectors, and exchange-traded funds (ETFs) du jour.

While it's true that momentum can persist, more often than not, popularity is the kiss of death.

In finance, the degree of popularity is typically referred to as sentiment.  Fundamentals matter in the long term, but sentiment is what really drives short- and intermediate-term moves in the financial markets.  Caution is, therefore, essential when sentiment reaches a bullish extreme.

The Texas Hedge

It was a no-brainer, can't-lose trade.  Pundits on CNBC and Bloomberg TV were supremely confident in the outcome.  Fund flows poured in to take advantage of its inevitability.  This was a "layup" - a sure thing.  The Bank of Japan (BOJ) was going to depress the value of the Japanese yen, and Japanese equities would rise due to exporters benefiting from a cheap currency.

Naturally, everyone wanted to be long Japanese stocks, but short the yen, and the WisdomTree Japan Hedged Equity ETF (NYSEARCA:DXJ) provided an easy way to do just that.

Except now investors are realizing that they aren't hedged at all.  Ironically, the yen has gone through the roof ever since the BOJ implemented a quasi-negative interest rate scheme.  The U.S. dollar/Japanese yen exchange rate (USD/JPY) recently hit its lowest level since October 2014 (a decline in USD/JPY represents dollar weakness, yen strength).

Thus, anyone betting on a decline in the yen is getting bludgeoned in the market.  Not only that, Japanese equities are, unsurprisingly, falling in tandem with USD/JPY.  This is a lose/lose situation for DXJ holders.

Since April 2015, when I warned that investors in currency "hedged" ETFs were essentially speculating on currency movements, DXJ has lost 26% of its value (including distributions).  Going back even further to early 2014, DXJ has produced a total return ofnegative 6%.

Alas, it was so popular!  Over the same time frame, the S&P 500 has returned a positive 16%.

Shifting Sentiment

To be sure, DXJ now offers a far better risk-reward proposition than it did a year ago.  Basically, the fund may excel because the trade is not nearly as popular.  We're even seeing currency futures speculators, in aggregate, bet on yenappreciation.

The last time this group had a net long position in the yen was 2012, right before the yen plummeted as "Abenomics" was introduced. In other words, the sentiment of this crowd is a contrarian indicator.  Sentiment notwithstanding, the fundamentals for Japan, in general, remain poor.  Japan has a shortage of the most precious natural resource on the planet: children.

Do the central planners really think that burning their currency at the stake is going to solve anything? Well, they certainly shouldn't.  Nonetheless, the short-term swings will continue, as prices are determined - at the margin - by human behavior and emotions.

This is why serially buying the most popular investments is a great way to destroy wealth.

Meanwhile, the fundamentals for U.S. Treasuries remain strong. The real trick, however, will be knowing when they, too, have become overly popular.

Originally published by Alan Gula on

Russia is Shooting Itself in the Foot Keller

Russia is shooting itself in the foot: Keller

(Bloomberg) -- Christian Keller, Head of EM Research at Barclays Capital, discusses the crisis in Ukraine, and his outlook for both Russia and China. He speaks on Bloomberg Television’s “The Pulse.”

Source: Bloomberg

Markit Alaric Blockchain - alaric trader securities broker stock trader

Blockchain: disruption or distraction?

(Markit) Jeffrey Billingham - a vice president in Markit’s Processing division and a leader of the Chain Gang discusses blockchain technology, Bitcoin protocol and the new market potential for the truly forward thinkers .

The financial industry began 2016 with a host of blockchain promises. While many of these promises show encouraging momentum, a clear implementation strategy remains elusive. If every bank, exchange, infrastructure provider and clearing house put their internal working groups in one room, all would agree to one point: blockchain technology is not a silver bullet for financial markets. However, beyond defining what the technology is not, few seem to agree on what the technology actually is.

The financial industry has invested over $1 billion in the last 14 months to support blockchain consortia, pilot programs, companies and other efforts to create consensus about implementing blockchain. This activity indicates a high level of excitement, but is atypical of how innovative technology enters a market. We would expect the industry to eschew consensus and exhibit bolder, unilateral moves in pursuit of competitive advantage. Moreover, if incumbent institutions were slow to move, we would expect blockchain startups to build new banks.

For now, neither is happening in earnest. A cynic would say the focus on partnerships only shows that players are hedging their bets. The eternal optimist would say that players need to partner to be successful.

Nevertheless, there is merit to the collaborative approach. A blockchain isn’t simply software to install, but rather the foundation of a robust peer-to-peer network. We at Markit certainly appreciate the time and efforts necessary to build a successful network. And, to be fair, at least one startup has obtained a banking license.

However, the question persists: why a blockchain? How did we go from a conversation about a digital currency to talk of a revolution in the creation and transfer of financial products and agreements?

Though unfashionable to admit, it started with some key perceptions about the Bitcoin protocol. Specifically:

1) Bitcoin transactions settle within minutes - minimal settlement latency.

2) Payers and receivers of bitcoin use a distributed ledger - no central data store.

While the financial industry struggled to come to terms with the post-crisis financial framework and its associated systemic costs, the Bitcoin protocol provided tantalizing solutions. Settlements, reconciliations, and the security apparatus around these processes, all of which can theoretically move to a blockchain, are massive drivers of cost for a financial enterprise.

At the same time, digital currency and distributed ledger startups had to reinvent themselves after the price of bitcoin slid throughout 2014. Realizing that budding interest from capital markets offered a lifeline, these companies moved away from digital currencies and towards concepts like enterprise blockchains, colored coins, metacoins, side chains, smart contracts, etc.

This union of convenience between cost-conscious financial firms and revenue-hungry technology firms propagated visions of a new operating paradigm in finance, but has yet to produce a long term framework that gets us there.

Instead, the industry distracted itself with a spate of false choices: it is “Bitcoin” or “The Blockchain?” Should a blockchain be “public” or “private?” Is this technology “the end of banking” or “just a database?” These questions prevent us from exploring the real elegance of blockchain technology.

If blockchains are to play a revolutionary role in financial services, 2016 must be the year that firms agree to disagree about the role of blockchain, forge their own paths, and dare others to follow.

Blockchain technology presents a new model for the architecture of the global financial system. That’s why consensus building, however well-intentioned, often results in a focus on the least common denominator, dimming our understanding of the bigger picture.

Speaking at the South by Southwest conference, Mark Thompson, CEO of The New York Times Company, explained how he thinks about new technology, specifically applying virtual reality tools to news reporting: “You can’t wait for someone to jump off the cliff, you have to jump first…We want to be braver than our rivals and be out there and be smart about it. Don’t make crazy bets when you’re not sure. But we cannot be complacent. We know what complacency leads to and we have to be brave.”

The financial industry must adopt the same mindset with blockchain. We can start with cost saving initiatives that digitize assets and agreements, but need to also understand that blockhain’s potential to transform management of collateral and securitize a range of financial products represents new market opportunities that will captured by truly forward thinkers in the industry.

by Jeffrey Billingham - a vice president in Markit’s Processing division and a leader of the Chain Gang, Markit’s group implementing distributed ledger technology.

Article originally published on Markit.

Still Time to Buy Gold Miners?

Still time to buy gold miners?

Finally, after months—nay, years—of dismal performance, gold mining stocks look good. Producers, I mean, not juniors.

Proxied by the Market Vectors Gold Miners ETF (NYSE Arca: GDX), these stocks are up better than 56 percent since the top of the year. That’s certainly good absolute performance, but it’s also good on a relative basis—relative to gold, that is.

The attractiveness of gold mining stocks traditionally boils down to leverage. Miners are bellwethers of sorts, traditionally rising earlier and faster than metal in bull cycles and swooning sooner and quicker in downturns. Leverage has been negative for GDX since 2010. You can see from the chart below that the mining ETF’s relative strength turned down months ahead of the 2011 price peak in the SPDR Gold Shares (NYSE Arca: GLD).



Bottoming action in late 2015 then presaged the 17 percent rise in GLD this year.

There’s another more compelling chart illustrating the resurgence in the miners. If you plot the price ratio of GLD to GDX, you get a graphic representation of investors’ favor. As the ratio rises, bullion becomes the preferred exposure for gold punters; when the ratio falls, mining stocks are fancied.

Just last week, the ratio broke through a key support level after cascading below the 200-day moving average, the first such occurrence in years.

Clearly, investors like gold now, but they love gold mining shares. And why not? Several of the big names in the GDX portfolio have washed themselves clean of the dirt that once sullied their balance sheets. That allows more of gold’s price buoyancy to percolate to the bottom line. A 10 percent rise in bullion could translate to a 50 percent hike in company cash flows. Now, that’s leverage.

And how does that translate to GDX’s price? GDX is dancing at the $22 level now. Long-term charts show a triple-top breakout pointing to a $36 objective. Patient investors are likely to use April price pullbacks to bargain shop, then ride the fund’s typical bullish seasonality and lighten up on their positions in August.

Originally posted by at The Market's Measure.

The New Minimum Requirements of the Advisor-Broker/Dealer Relationship

New requirements of the advisor-broker/dealer relationship

Not that long ago it was enough for an independent broker/dealer (IBD) to provide their advisors with basic clearing and custody and mandatory regulatory oversight. But today, with so many broker/dealers to choose from, advisors have come to expect much more. Higher levels of operational and practice management support, accelerated growth, cutting-edge technology and a strong platform are among the requirements FAs seek when considering a firm.

Yet with so many options out there, what should an IBD advisor do to make sure they are with the right broker/dealer? Is your current b/d still the one that can best serve your clients and allow you to meet your own business goals?

Checking in With Yourself

Before starting any due diligence, it’s important to have a strategy that begins with “checking in” with yourself to gain a true understanding of your requirements.

That means asking yourself:

“What do I wish my b/d would do to better support me and help me reach my goals?”
“Do I see myself with my current b/d five or 10 years from now?”
“If I had to start over, would I still choose my current b/d, given the options across the landscape and how my b/d has changed?”

Broker/Dealer Assessment: The Nine Minimum Requirements

At a minimum, all quality b/ds should offer the following:

  1. A robust platform with access to financial and estate planning, trust, insurance, lending and alternatives, etc. The platform should allow you to capture clients of all sizes including niche business.
  2. Best-in-class technology with the financial strength and commitment to an ongoing investment.
  3. The sophistication and expertise to anticipate, understand and prepare for regulatory changes. The firm should respond by creating policies and practices that are appropriate for high-quality, top advisors and not merely designed to manage to the lowest common denominator.
  4. Support for business growth—both inorganic and organic. The firm will act as a strategic partner by providing help with inorganic growth such as recruiting, identifying acquisition possibilities and providing access to capital and expertise. The firm should also have organic strategies for growth, including marketing support for new client development and the tools to support the business you want to develop.
  5. Practice management support, including operational support to maximize your team’s efficiency and the profitability of the business.
  6. Succession planning assistance by helping to develop next-generation talent through training, recruiting and human resource development.
  7. Best practices for wealth management and investment management represented by the ability to associate and share thought leadership with like-minded individuals.
  8. Fair and transparent economics so you are able to readily understand the payout and the true costs of associating with a b/d, and they should be well aligned with how you do your business.
  9. An accessible, responsive and knowledgeable support team that makes themselves available to you with answers that are meaningful and help, not hinder, your business processes.

Based on these nine criteria, you may find that your current b/d is lacking. With the many options out there for independents, why is it that some dissatisfied advisors opt to stay where they are? They typically fall into one or more of the following categories:

  1. They assume that all b/ds are essentially the same and nothing better exists.
  2. They are simply “comfortable enough.” While they have some frustrations, they are able to make it work. The challenges don’t yet impact their ability to accomplish what they need to, and they are still able to insulate clients from whatever imperfections exist.
  3. They find the array of choices overwhelming and confusing. It’s easier to stay than to take on the additional burden of exploration and moving a business.

While a move an advisor made a decade or more ago may have been right then, it doesn’t mean that the firm is still right. It would behoove you to re-evaluate periodically, even if you feel perfectly content, to confirm you are still in the best place to serve your clients.

Originally published by at WealthManagement Magazine.