The Markets May 5, 2010

Equities Were Sweet in Q110

The Mercer investment consulting first-quarter 2010 Defined Contribution Universe Summary found gains in all equity markets.
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Mercer said the U.S. equity asset class outperformed international equities for the quarter by 450 basis points. Global equities gained 3.2% for the quarter and outperformed international equities by 230 basis points.

Meanwhile, during the first quarter, value funds outperformed growth funds, as the median large-cap value fund posted a gain of 5.8% compared to a gain of 4.2% for the median large cap growth fund. The small-cap segment of the market trended in the same direction as large-cap stocks, as the median small-cap value fund outperformed the median small-cap growth fund by 200 basis points.

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According to Mercer, the median large-cap fund underperformed the S&P 500 Index by 40 basis points for the first quarter. Small-cap funds outperformed their large-cap counterparts for the quarter, as the median small-cap fund gained 7.9% for the quarter versus a gain of 5% for the median large-cap fund.

Within the international equity asset class, the median manager outperformed the MSCI EAFE Index by 80 basis points during the quarter. The median emerging markets manager gained 2.7% for the quarter and slightly outperformed the MSCI Emerging Markets Free Index by 20 basis points.

The median core fixed-income fund outperformed the Barclays Capital Aggregate index for the first quarter by 40 basis points.

Mercer said the S&P 500 Index gained 5.4% during the quarter while the Barclays Capital Aggregate Bond Index posted a gain of 1.8%. Inflation protected securities posted a return of 0.6 % for the quarter.

In Practice May 5, 2010

Advisers Look to Peers for Business Tips

Most financial advisers believe they can learn how to make their business more efficient and effective through their peers, according to the latest SEI Quick Poll.
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In fact, nearly all (90%) poll participants said that learning best practices of peers is important, according to the survey results.

The poll of 417 advisers by SEI also found that the majority (66%) of advisers said their top priority this year is to “create new initiatives to increase sales and grow business,” followed by communicating with clients and prospects more frequently.

While advisers plan to grow their business, they were varied about how they plan to grow. More than half (55%) said they would want a coach to offer new business development advice. When asked to identify what tactics and strategies they planned to implement to achieve their goal of business growth, the top three responses were: use client referrals (42%), solidify professional relationships for referrals (32%), and create a formalized marketing plan (20%).

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Poll participants were also asked to identify how they plan to improve cleint communication. The top three responses were: increase frequency of outbound communications (30%), increase frequency of client review meetings (25%) and develop a new approach to client review meetings (23%).

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