Daily Archives: August 4, 2020

VNFA Named Again to Financial Times 300 Top Registered Investment Advisers in USA

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Valley National Financial Advisors (VNFA) is pleased to announce it has been named to the 2020 edition of the Financial Times 300 Top Registered Investment Advisers. The list recognizes top independent RIA firms from across the U.S. This is VNFAs second year in a row being honored as part of this national list.

This is the seventh annual FT 300 list, produced independently by Ignites Research, a division of Money-Media, Inc., on behalf of the Financial Times. Ignites Research provides business intelligence on investment management.

FA 300: Top RIAs: The List

RIA firms applied for consideration, having met a minimum set of criteria. Applicants were then graded on six factors: assets under management (AUM); AUM growth rate; years in existence; advanced industry credentials of the firm’s advisers; online accessibility; and compliance records. There are no fees or other considerations required of RIAs that apply for the FT 300.

The final FT 300 represents an impressive cohort of elite RIA firms, as the median AUM of this year’s group is $1.9 billion. The FT 300 Top RIAs represent 39 different states and Washington, D.C.

“As our firm celebrates 35 years in business, it is wonderful to have this additional industry recognition,” says Matt Petrozelli, CEO. “2020 has been unprecedented in many ways, but our firm has been able to maintain our client-first focus and we are confident that we will emerge from this pandemic period stronger than ever. The commitment from our team of professionals along with a strong business infrastructure have provided a stability that is hard to come by right now; and, for that, I could not be prouder.”

The FT 300 is one in series of rankings of top advisers by the Financial Times, including the FT 401 (DC retirement plan advisers) and the FT 400 (broker-dealer advisers).

The Financial Times 300 Top Registered Investment Advisers is an independent listing produced annually by Ignites Research, a division of Money-Media, Inc., on behalf of the Financial Times (July 2020). The FT 300 is based on data gathered from RIA firms, regulatory disclosures, and the FT’s research. The listing reflected each practice’s performance in six primary areas: assets under management, asset growth, compliance record, years in existence, credentials and online accessibility. Over 750 qualified firms applied for the award, 300 of which were selected (40%). This award does not evaluate the quality of services provided to clients and is not indicative of the practice’s future performance. Neither the RIA firms nor their employees pay a fee to The Financial Times in exchange for inclusion in the FT 300.

Did You Know…?

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Regulation Best Interest (BI) and Our Clients
by Matthew Petrozelli, CEO
Regulation BI is designed to establish a “best interest” standard of conduct for broker dealers and associated persons when they make a recommendation to a retail customer of any securities transaction or investment strategy involving securities, including recommendations of types of accounts. Last week, in compliance with the U.S. Securities and Exchange Commission (SEC) and Regulation BI, we sent a new regulatory document out to all existing clients – Form CRS. This form provides our clients and the investing public with more transparency around our broker dealer, Valley National Investments, Inc., and our Registered Investment Advisor Firm, Valley National Advisers, Inc. Fees, costs and conflicts of interest are highlighted in addition to important links that help educate new clients. Since the delivery of Form CRS, I want to share some FAQs:

Does my relationship or the fees I pay with VNFA change?
No, this is a disclosure document only. All fee and compensation arrangements are still the same as is your relationship with your advisor.

What is the difference between Valley National Advisers (VNA) and Valley National Investments (VNI)?
VNA is a SEC Register Investment Advisor, which means that our Financial Advisors are held to a fiduciary standard and are obligated to put their clients’ interests ahead of their own. Clients who use VNA are charged an asset management fee and/or separate flat/hourly fee for planning. VNI is a FINRA registered broker dealer that provides securities to clients for a commission. VNI focuses on sale of securities and does not offer discretionary investment management.

Why have both?
VNFA is dedicated to giving our clients the most options. Most of our Financial Advisors are dually registered and can help clients navigate what is best. Today, we see most of our clients use VNA as it has more options for customization for planning, wealth management, and uses a fiduciary standard.

Do I need to take any action?
No. Please reach out to your Financial Advisor if you have specific questions. Regulations have changed significantly since our firm was founded in 1985. For 35 years, VNFA has been committed to core values anchored in a client-first culture. Our team always has and will continue to serve the best interests of our clients in pursuit of their financial goals.

The Markets This Week

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by Maurice (Mo) Spolan, Investment Research Analyst
Stocks were up around 2% last week, closing out July with gains near 6%, a very strong month of returns. Nonetheless, Q2 GDP fell 32.9% on an annualized basis, the fourth-greatest decline in the last 100 years, according to MFS Investments. Corporate profits are also in deterioration, as Q2 earnings have thus far arrived 36% below last year’s figures, the largest slump since 2008.

Tech stocks were in the spotlight as antitrust hearings investigated the extent to which economic power is concentrated in Amazon, Google, Facebook and Apple. Not ironically, such companies reported growing revenues in Q2 while the “brick-and-mortar economy” struggles gravely during the global pandemic. Tech stocks continue to hold an outsized position in the major indices and are therefore a major driver of the market’s resiliency in 2020.

Unemployment benefits officially expired on Friday while Congress remains in discussion to provide the next round of support. Though the two parties are still distant in their proposals, it is highly probable that a deal of some magnitude will be passed. Updates will be provided in future commentaries as news materializes.

The Numbers & “Heat Map”

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THE NUMBERS
Sources: Index Returns: Morningstar Workstation. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. Three, five and ten year returns are annualized. Interest Rates: Federal Reserve, Mortgage Bankers Association

MARKET HEAT MAP
The health of the economy is a key driver of long-term returns in the stock market. Below, we assess the key economic conditions that we believe are of particular importance to investors.

US ECONOMY

CONSUMER HEALTH

NEGATIVE

 GDP declined at an annualized rate of 32.9% in Q2, the fourth-largest fall in the last 100 years. Although the figure is staggering, it was in-line with economists’ expectations.

CORPORATE EARNINGS

VERY NEGATIVE

 Earnings have declined by 36% thus far in Q2, the sharpest year-over-year decline since 2008.

EMPLOYMENT

VERY NEGATIVE

 Non-farm payroll increased by 4.8 million jobs in June, led by the Leisure & Hospitality sector, as the unemployment rate declined to 11.1%. However, the unemployment rate remains historically high and is still 7.6% higher than it was in February.

INFLATION

POSITIVE

 The deflationary environment created by COVID-19 should provide additional room for robust stimulus from both fiscal and monetary policy initiatives. However, we will be watching closely in the intermediate term for second and third order effects leading to a return of inflationary pressure.

FISCAL POLICY

VERY POSITIVE

 Unemployment benefits, which have been instrumental in stabilizing the economy, expired at July’s end. Congress is working to pass another fiscal package; however, the two parties remain distant on the appropriate size of the stimulus.

MONETARY POLICY

VERY POSITIVE

 The Federal Reserve has supported asset markets with unprecedented speed and magnitude in response to COVID-19.

GLOBAL CONSIDERATIONS

GEOPOLITICAL RISKS

VERY NEGATIVE

 The relationship between the US and China, the world’s two largest economies, was already weakened by the trade war but has deteriorated further as a result of Covid-19.

ECONOMIC RISKS

VERY NEGATIVE

 The impacts from COVID-19 were as swift and pronounced as any shock in modern times. Robust monetary and fiscal stimulus stabilized the system, and several measures of the economy improved in May and June. However, economic activity remains well-below that in 2019, and uncertainty remains very high.

The “Heat Map” is a subjective analysis based upon metrics that VNFA’s investment committee believes are important to financial markets and the economy. The “Heat Map” is designed for informational purposes only and is not intended for use as a basis for investment decisions.

Quote of the Week

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“Our goal is that with the help of the community, collectively [ArtQuest Foundation board] will raise at least $1 million to support ArtsQuest and Musikfest, a number that symbolizes the one million people who attend the festival each year. If even half of our Musikfest fans give only $1, we’ll reach that number.” – Thomas Riddle, chair of the ArtsQuest Foundation board (and VNFA’s Founder & Chairman) READ MORE

“Your Financial Choices”

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Tune in Wednesday, 6 PM for “Your Financial Choices” show on WDIY: Regulation Best Interest

Laurie has returned to the studio which means she can take your questions live on the air at 610-758-8810, or address those submitted via  yourfinancialchoices.com.

Recordings of past shows are available to listen or download at both yourfinancialchoices.com and wdiy.org.

TAX TIP

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IRS statement on interest payments
Interest on individual 2019 refunds reflected on returns filed by July 15, 2020 will generally be paid from April 15, 2020 until the date of the refund. Interest payments may be received separately from the refund. READ MORE