Yeah. You operate at such a high level it’s hard to keep up. The times I’ve sat through dinners with wholesalers has really taxed my mind. Especialy the conversations around how hard the Series exams are. For some reason, you think the only world that exists is the one in which you are familiar. I have full discretion of SMAs within 401ks and other qualified plans. There are no preselected investments options. My restriction is the world’s security markets. Record keepers like verisight(now Newport) charge incredibly low fees. So low, it is almost neglible. And they’ll even negotiate below advertised rates to retain business. Keep peddling your products and the new legislation will have no affect on me. I just dont think the current way you screw the public should be made illegal. Buyer beware and all.
^There you go again. 3(21) covers advice on selecting investment options. Rarely has discretion. You simply have no idea how SMAs are run within a 401(k). There are no preselected investment options. Hint: Requires an individual participant to accept responsibility. Similar to using a brokerage window and there is no percentage limit. The manager can control 100% of the account. School is out.
Again, I only caught the end of the segment where he was talking about the plan his company setup and the inability of the consultant they hired to explain his fees and his rationale for selecting the funds he did. There very well could have been unreasonable criticisms earlier in the segment. When I tuned in, they had just finished showing a clip of someone saying something to the effect of “sometimes I just put the money in index funds”, but I have no context for that so can only comment on what they talked about after.
You are right that I don’t know much about SMAs in 401k plans, but that’s mainly because they’re very rarely used. And I did give you far too much credit for even imagining you’re a 3(21) (and no where close to a 3(38)). You’re just an RIA that manages individual participants’ 401k allocations. That’s just sad. There are some back office guys at Schwab that offer that service in our plan.
The irony is you’re the product pusher. You may have discretion, but you’re ultimately the one choosing the products and selling your clients on them. Next you’ll tell me you work for an hourly fee. That’s just…sad.
Ah. Product pusher? I don’t collect commission. Never made a solicitation for business. Individual securities don’t pay anything. How would I determine what “products” to push? Sad to have entire partnerships as clients that jumped through hoops to get me discretion? Don’t follow. Must be that high level you function at. Maybe somebody else can help me understand. And certainly nothing special about advising a qualified plan. Do salesman look up to such people? So what years did you take the CFA exams? Doesn’t look like you used the forum during your studies.
Essentially you’re one level below an Edward Jones rep. I can see why DOL would worry you. You’re about to be out of a job.
As for your odd obsession with my CFA membership, I’d say go through my history and you’ll find when I posted in the CFA forums. But, considering you work hourly, you may just want to take my word for it and not waste your time.
Thank you for reminding me why I ignore your posts. Smell you later dork.
You’re a strange one, a salesman regularly posting on a CFA related forum apparently with no ambition to do anything beyond peddling product. You tried to suggest employees will lose matching if revenue is not shared. Doesn’t even pass the smell test. Did your head of distribution come up with that nugget? Maybe he should go back to Enterprise. You think those with discretion still have to “sell” product. Shows you have no idea what is involved in running a platform of SMAs. And you criticise the occupation…on this forum. Might as well go hang out on a gay forum and ridicule sodomy. I would say just be content where you are. Collect your 300k. Your superiors will figure out how to keep the revenue coming even with the new legislation. And sales skills are transferable if they don’t. You can always go work for commission at the local furniture store. 300k might be tough, but I bet you could do 150k with long hours.
^ Hate to break it to you, but if your a client facing advisor, then your in sales too. Your a discretionary advisor…well congrats on that. Big deal. So you select individual investmetns rather than use “products” as you refer to them - who cares.
our business involves discretionary and non-discretionary arrangements. there is no difference between the two in terms of what we buy. we choose to avoid using product where we can but the non-equity asset classes force us into product. we still add value by differentiating between product in those asset classes. most good mutual funds don’t charge much more than ETFs these days anyway. see PIMCO for an example. all in fees of 55-80bps depending on invested $. compare that to 30-40bps for a collection of ETFs that would provide similar passive exposure and the ETFs have spreads which add to the cost.
from the sound of it, you’re both hacksaw. individual security focused fee-based business (Canadian definition) with low cost fixed income and alternative funds or hacksaw.
Definitely not a big deal. I have very little client face time as is the norm for those that run SMAs. More similar, if not just about identical, to running a fund. The difference is that you may or may not have more than one investment policy directive. And you are more likely to know the client, depending on the customization. Personally, I have been asked to sit in on third party pitches to parternships I have as I clients, but really not part of my job description. Not sure why anyone would group the position in with advisors. The would be like claiming a mutual fund manager is in sales. Could assist on occasion, but really not part of the day to day activities. But thanks for chiming in.
You might find the recent postings on philosophicaleconomics.com interesting. To keep it short… Active management is easiest in markets dominated by other active managers. If 100/100 participants are actively betting on various areas of the markets, rather than owining the whole market, then you have all sorts of qualified people ‘in the game’. If you are in the top 50 smartest, you should be able to outperform the other 51 participants over long periods of time.
However, if the least qualified 50 decide to no longer play the active management game, then only the 50 smartest remain to play the game. Now the level of skill required to outperform is significantly higher and you need to be in the top 25 to outperform.
Conclusion, more indexers raises the efficiency of market prices, raises the bar of intelligence to outperform and, as the most recent posting concludes, eventually lowers market liquidity.
Doesn’t this theory assume that a fixed % of money in the market is actively managed and a fixed % passively? I.E. the only changing variable being the # of active vs passive participants?
I would think as the # of passive indexers increased, so does the % of total money in market that is indexing, thereby increasing pricing inefficiency as the repsonse rate to new information decreases. This would increase the potential alpha active managers could generate, eventually bringing the passively managed money back to actively managed side - full circle. Process repeats.