Insurable Interest Canadian Insurance Blog

What You Need to Know Workers have noticed the headlines about Social Security solvency. They see in-plan annuities as a good supplement. But where are the in-plan annuities? Concern among retirement savers about the future of Social Security is certainly not new. This continued perception that the system might run out of money is leading to interest in other sources of retirement income. A majority of Americans who are participating in an employer-sponsored retirement plan now say they would take advantage of “income solutions” (read: annuities) if they were offered as investment options, according to the 2023 Schroders US Retirement Survey. This year’s Schroders survey, conducted by 8 Acre Perspective, polled 2,000 investors nationwide between the ages of 27 and 79. Only 10% of those who aren’t retired said they will wait until the full retirement age of 70 to begin receiving maximum Social Security benefits. The most popular reason given for this decision (by 44% of non-retired respondents) was concern that Social Security could run out of money or stop making payments. As a result, the Schroders survey found that eight out of 10 investors currently participating in 401(k) and other defined contribution plans view in-plan “retirement income solutions”...

What You Need to Know In Q3, wealth units at Morgan Stanley, Bank of America and Wells Fargo all underperformed relative to 2022. Executives blame high interest rates encouraging retail investors to keep more of their assets in cash and cash alternatives. But they also see signs that things will turn around in 2024. After years of strong growth, including through last year’s tumultuous market, wealth management divisions at some of the largest financial institutions have finally come up short of expectations.  As firms reported earnings, results from the wealth businesses at Morgan Stanley, Bank of America and Wells Fargo all underperformed relative to 2022. Executives at the firms blame high interest rates encouraging retail investors to keep more of their assets in cash and higher-yielding cash alternatives.  Morgan Stanley brought in $35.7 billion in net new assets during the third quarter of 2023, 45% less than it brought in during the year-ago period and 60% less than the previous quarter. Net revenue dipped 4% from the previous quarter and total assets under management fell 2%. While revenue and client assets are up 5% and 16% year over year, respectively, it’s a far cry from October 2022, when Morgan Stanley...

Stocks fell around the world, while bonds climbed with gold on concern the Israel-Hamas war will escalate into a wider conflict in the Middle East. Oil pulled back after hitting $90 a barrel. The S&P 500 dropped over 1%, notching its worst week in a month. The gauge breached its 200-day moving average — seen by some chartists as a bearish signal. Wall Street’s “fear gauge” — the VIX — rose to the highest since March. Megacaps sold off, with Tesla Inc. posting its biggest weekly slide since December. American Express Co. tumbled amid disappointing volumes on its cards. Regions Financial Corp. sank after warning of further declines in net interest income. Traders continued to seek haven amid the latest geopolitical developments. Treasury yields pared weekly increases that pushed the 10-year rate to almost 5%. Gold edged closer to $2,000 an ounce. “The ongoing situation in the Middle East has triggered a surge of volatility in the oil and stock markets, compelling investors to re-evaluate their strategies and shift their focus from riskier assets to ‘safer’ investments,” said Fawad Razaqzada, market analyst at City Index and Forex.com. Hamas released two American citizens who had been held captive in Gaza. Leaders...

What You Need to Know PGIM conducted six separate surveys gauging financial advisors’ interest in various fixed income asset classes. There have been significant shifts in interest since 2020, especially with respect to U.S. Treasurys. It’s important for advisors to stay abreast of the changing market environment to ensure that client portfolios are optimally designed. Fixed income is a relatively broad asset class. Unlike equities, which are generally considered to be relatively risky investments, risks in fixed income can vary dramatically by asset class — consider the risks of money market funds versus high-yield bonds. In this piece, I provide some perspective about how interest in various fixed income classes has evolved from May 2020 to May 2023 using six surveys conducted among financial advisors. I find that there have been significant shifts in interest over the period, especially with respect to U.S. Treasurys. This information is potentially useful to financial advisors because it not only provides perspective about what types of fixed income asset classes are actively being considered but also points to fixed income sectors in which financial advisors should be familiar with the available products and strategies. Inside the Surveys The analysis relies on six separate surveys conducted by...