FULL COVERAGE: THE ADVICE INDUSTRY TACKLES COVID-19 PAGE 4 MARCH 16-20, 2020 THE TRUSTED RESOURCE FOR FINANCIAL ADVISERS INVESTMENTNEWS.COM $5.00 / $89 YEAR NEWSPAPER | VOL. 24, NO. 11 | COPYRIGHT INVESTMENTNEWS LLC. | ALL RIGHTS RESERVED RIA MEGA MERGERS DRAW SCRUTINY FROM THE FEDS PAGE 10 If you just focus on the Expense Ratio, what are you missing? When you’re calculating ETF costs, look for liquidity. Without it, trading costs can add up fast. SPDR ETFs, including SPY and DIA, traded more than our top two competitors combined. See how liquidity affects your ETF ownership at spdrs.com/totalcost. Source: Bloomberg Finance LP, as of 11/19/2019. prices above or below the ETF’s net asset value. SPDR® S&P 500® ETF Trust and SPDR Dow Corporation. No financial product offered by State Based on 180 day dollar trading volume. Top two ETF shares may not readily trade in all market Jones® Industrial AverageSM ETF are unit Street or its affiliates is sponsored, endorsed, sold Before investing, consider the funds’ investment objectives, risks, charges and expenses. To obtain a prospectus competitors include BlackRock and Vanguard. conditions. Brokerage commissions and ETF investment trusts listed on NYSE Arca, Inc. or promoted by S&P. Past performance is not a guarantee of future expenses will reduce returns. or summary prospectus, which contains this and other information, call 1.866.787.2257 or visit www.spdrs.com. results. SPDR®, S&P and S&P 500 are registered ALPS Distributors, Inc. (fund distributor); State Equity securities may fluctuate in value in trademarks of Standard & Poor’s Financial Street Global Advisors Funds Distributors, LLC Read it carefully. ETFs trade like stocks, are subject to investment response to the activities of individual companies Services LLC (S&P), a division of S&P Global, (marketing agent). risk, fluctuate in market value and may trade at and general market and economic conditions. and have been licensed for use by State Street Not FDIC Insured No Bank Guarantee May Lose Value 2628493.1.1.AM.RTL IN012169_left.indd 2 1/2/20 10:30 AM If you just focus on the Expense Ratio, what are you missing? When you’re calculating ETF costs, look for liquidity. Without it, trading costs can add up fast. SPDR ETFs, including SPY and DIA, traded more than our top two competitors combined. See how liquidity affects your ETF ownership at spdrs.com/totalcost. Source: Bloomberg Finance LP, as of 11/19/2019. prices above or below the ETF’s net asset value. SPDR® S&P 500® ETF Trust and SPDR Dow Corporation. No financial product offered by State Based on 180 day dollar trading volume. Top two ETF shares may not readily trade in all market Jones® Industrial AverageSM ETF are unit Street or its affiliates is sponsored, endorsed, sold Before investing, consider the funds’ investment objectives, risks, charges and expenses. To obtain a prospectus competitors include BlackRock and Vanguard. conditions. Brokerage commissions and ETF investment trusts listed on NYSE Arca, Inc. or promoted by S&P. Past performance is not a guarantee of future expenses will reduce returns. or summary prospectus, which contains this and other information, call 1.866.787.2257 or visit www.spdrs.com. results. SPDR®, S&P and S&P 500 are registered ALPS Distributors, Inc. (fund distributor); State Equity securities may fluctuate in value in trademarks of Standard & Poor’s Financial Street Global Advisors Funds Distributors, LLC Read it carefully. ETFs trade like stocks, are subject to investment response to the activities of individual companies Services LLC (S&P), a division of S&P Global, (marketing agent). risk, fluctuate in market value and may trade at and general market and economic conditions. and have been licensed for use by State Street Not FDIC Insured No Bank Guarantee May Lose Value 2628493.1.1.AM.RTL IN012169_right.indd 3 1/2/20 10:31 AM TopNews ACCURACY / EXCELLENCE / FAIRNESS / IMPARTIALITY / INDEPENDENCE 6 On Advice ESG wins big She persists The 2020 Refinitiv Erin Botsford on the 8 Editorial Lipper awards. advantages of women INSIDE 14 On Retirement Page 22 advisers. Page 35 MAR. 16-20, 2020 Cover illustration : Taylor Callery EDITOR’S NOTE Heed your Trump’s payroll inner Kipling udyard Kipling extolled the Rvirtues of keeping your head tax plan doesn’t “when all those about you are losing theirs.” As the COVID-19 panic rages, the financial advice cut it on the Hill industry faces a challenge to adapt a business built on relation- ships to one of “social distanc- ing.” As Ryan W. Neal reports on Page 5, in-person meetings are being replaced by phone and video calls, while industry events are being rescheduled as GEORGE B. coronavirus fears MORIARTY spread. Some BY MARK SCHOEFF JR. advisers, naturally, are worried about the impact digital-only PRESIDENT DONALD TRUMP is communications will have on calling for a payroll tax cut as an client relationships. antidote to the economic sickness But a key component of rela- brought on by COVID-19, but the tionship management is wealth idea is getting a lukewarm initial re- management. Here are three ception among lawmakers. resources that provide invaluable “Currently, there is little appe- circumspection. Bear market hammers tite for a payroll tax cut on Capi- In a March 9 post on Josh tol Hill in both parties,” said Brian Brown’s blog, The Reformed Gardner, managing director at Broker, he offered these nuggets: Keefe Bruyette & Woods, an invest- “This is the Super Bowl for finan- TDFs, but designs ment bank and broker-dealer that cial advisers … I can tell you de- specializes in the financial services finitively that these are moments sector. when advisor-client relationships Relief from payroll taxes, of are solidified … Keeping people improved since 2008 which Social Security and Medi- from doing what might feel like a care taxes are part, is not likely to relief now but is sure to represent be included in any legislative pack- a mistake in hindsight.” BY EMILE HALLEZ approach risk, in many age Congress puts together in the And Meb Faber posted on KEY POINTS cases reducing stock al- next week or so. The Senate will be MebFaber.com: “Will my strategy THE COVID-19 bear mar- locations in favor of fixed in session this week, but the House • Some tar- be the best strategy devised, or ket has provided a test for income. In other instanc- is scheduled to be on recess. get-date funds the best strategy for everyone? target-date funds, some of es, fund providers have Sen. Charles Grassley, R-Iowa have seen 25% Absolutely not. But is it the best which have seen negative ramped up their levels and chairman of the Senate Fi- losses since strategy for me? I think so.” returns of 25% since Feb. of risk, seeking higher nance Committee, is considering Feb. 25. Finally, InvestmentNews has 24. returns. And one of the “targeted tax relief measures” to a great video series on good Those products, the • Fund managers most significant changes respond to the economic shock investment behavior: Investment- predominant invest- are adjusting is the wider ability that caused by the coronavirus, spokes- news.com/onyourbestbehavior. ment vehicles in 401(k) how these portfolio managers have man Michael Zona said in a state- None of us knows when this plans, suffered big hits in products in quickly adjusting al- ment. pandemic will resolve, but it will the 2008 financial crisis approach risk. locations in response to He did not reveal Mr. Grassley’s resolve, and cooler heads today and were heavily scruti- market conditions. position on a payroll tax cut will prevail tomorrow. nized for the losses many With the recent per- “All reasonable options remain near-retirees saw in their portfolios. formance test, some of those chang- on the table,” Mr. Zona said. [email protected] But since then, fund managers es appear to have paid off, at least Sen. Ron Wyden, D-Ore., and the Twitter: @geomoriarty have adjusted how their products CONTINUED ON PAGE 37 CONTINUED ON PAGE 36 Contents © Copyright 2020 by InvestmentNews LLC. All rights reserved. Vol. 24, No. 11, March 16, 2020. InvestmentNews (ISSN 1098-1837) is published weekly, except two weeks in July and August, the first week in September and the last week in December. by InvestmentNews LLC. The agent is Crain Communications Inc., 1155 Gratiot Avenue, Detroit, MI 48207-2912. Periodicals postage paid at Detroit, MI and additional mailing offices. POSTMASTER: Send address changes to InvestmentNews, Circulation Dept., 1155 Gratiot Avenue, Detroit, MI 48207-2912. U.S. subscription price: $89 a year. 4 | InvestmentNews March 16, 2020 InvestmentNews.com “Everyone is scattered while you’re busier than ever,” Mr. King said. “It’s a perfect storm, unfortunately, for bad things to happen to your business. The risk of compliance issues and viola- tions increases dramatically.” The chief compliance officer is the key person to help a firm avoid mis- steps. But the logistics of that role change when advisers are working from far-flung locations instead of un- der one roof, and the CCO can’t roam Working from home increases the halls to check on colleagues. Trump’s payroll NO SUPERVISION compliance risks for advisers “If people are not in the office, you can’t tax holiday could tell if they’re working or not working and what exactly they are saying to BY MARK SCHOEFF JR. caused by the pandemic. customers,” said Amy Lynch, presi- Market volatility, working remotely dent of FrontLine Compliance. “You’re hurt US economy IN RESPONSE TO the rapidly spread- and the enhanced cybersecurity vul- counting on staff coming to you rather ing coronavirus, some financial adviso- nerability introduced by doing so, take than you being able to discover [prob- ry firms are telling their staffs to work firms into a danger zone, said G.J.