Week’s Best: Charles Schwab’s Net New Assets Slip

A critique of tax-managed mutual funds. Have tax-managed equity mutual funds outlived their utility? Our columnist writes that the funds have a sensible aim: offering low to zero capital gain distributions in order to minimize or eliminate the taxes investors will have to pay on their fund holdings. But he argues that exchange-traded funds have largely resolved that issue by skirting the tax implications through secondary-market trading. He writes that while tax-managed mutual funds “have their merits,” they have started to seem like a vaccine for a disease that has already been cured.

Not all in the family. In an ideal world, the children of wealthy clients would eventually become clients of their parents’ advisor themselves. But those multigenerational relationships are rare, according to a new survey from industry researcher Cerulli Associates. The firm’s research shows that just 19% of affluent investors—those with more than $250,000 of investible assets—work with their parents’ advisor. Cerulli argues that its findings should prompt advisory firms to make more of an effort to court clients’ children, including potentially bringing in another advisor within the practice to handle next-generation relationships.

LPL’s new channel. LPL Financial has launched a new employee channel for advisors serving wealthy clients. Most LPL-affiliated advisors are independent contractors, but the new channel, dubbed Private Wealth Management, will be staffed with W-2 employees. LPL’s current employee channel, Linsco, caters to mass-affluent investors. LPL sees its new affiliation model as a potentially attractive environment for advisors working in large national brokerages or private banks, saying it can offer greater flexibility and higher pay than those competitors.

More than meetings. If a client meeting is just a meeting, the advisor has failed. If that sounds harsh, it’s because Dennis Mosely-Williams argues that advisors need to think about turning meetings into events at a time when the ever-expanding galaxy of low-cost products and services means that advisors must do more to stand out. Mosely-Williams, a consultant, shared his thoughts on Barron’s The Way Forward podcast, urging advisors to “ask your clients to buy into you, not from you.”

The Kraken wants to do marketing better. Snappy Kraken launched in 2016 with the premise that advisors didn’t have a lot of great options for building content, orchestrating compelling campaigns, and converting prospects into clients. Now the company reaches advisors working with around $1 trillion in client assets. Most of its customers are in the registered investment advisor channel, but the company has been working to build up its profile in the broker-dealer space and recently took a big step forward on that front when it secured preferred-vendor status from LPL Financial.

Our Q&A is with Stephanie Link, a familiar face for many readers. She’s not only the chief investment strategist at Hightower, but she’s a regular on CNBC. Link says she sees plenty of opportunity in equities, including FAANG names and industrials. She explains why the U.S. economy has defied expectations of a slowdown in 2023 and shares her advice for staying composed and confident in front of the camera.

Enjoy your weekend.