Client Service March 1, 2018

Americans Plan to Turn to Advisers for Tax Reform Guidance

The Tax Cuts and Jobs Act has also increased Americans’ appetite for equities.

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Asked who they will turn to for help navigating the Tax Cuts and Jobs Act, Americans most commonly cited financial advisers (25%), followed by accountants (14%) and tax-preparation services (11%), TD Ameritrade learned in an online survey of 1,000 adults with at least $10,000 in investable assets, conducted in late January. A mere 25% said they understand the new law.

“There are plenty of experts offering their views on the new tax code and how investors should respond, yet we find, once again, that investors want advice and guidance from someone they trust, especially in times of uncertainty and change,” says Tom Nally, president of TD Ameritrade Institutional. “People want to know that someone has their back. More often than not, that trusted individuals is their personal financial adviser.”

Thirty-five percent of Americans said they expected to see larger paychecks as a result of the reform, although 22% expected to take home less. Views on whether the new law benefits the country are also mixed, with 41% believing they will benefit the economy, and 35% thinking they will have a negative effect. Sixty-three percent said they think people who earn more than they do will benefit more, and 55% said that very wealthy people will benefit the most.

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Twenty-two percent of Americans said they love the new tax plan, 29% said they hate it, and 49% said they are neutral. Among Republican Americans, 42% love it, a mere 9% of Democrats said the same, while 20% of Independents said the love the new law. Wealthier households, those with investable assets of $250,000 or more, love the new law, while this is true for only 22% of those in the $100,000 to $249,000 bracket and 20% of those in the <$100,000 bracket.

Thirty percent said they expect the taxes they will pay next year for 2018 will be lower than this year, 33% expect to pay more, 24% said they don’t expect and changes, and 13% said they didn’t know what the outcome will be.

The survey also found that Americans have an increased appetite for equities, with 30% wanting to invest in individual stocks, 23% in equity mutual funds and 15% in equity exchange-traded funds (ETFs). Fifty-seven percent said they would consider contributing more to their retirement account, and 24% said they would consider moving to an area of the country with lower taxes.

Koski Research conducted the survey for TD Ameritrade. The full findings of the report, Americans & Taxes: An Individual Investor Survey, can be downloaded here.
Products March 1, 2018

Investment Products and Services Launches

Wilmington Trust to Support Franklin Templeton CITs; Ryan Labs Releases Strategy for Corporate and Public Pensions; and TriLine Issues Energy-Related ETF.

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Wilmington Trust, N.A. has been selected by Franklin Templeton Investments to provide administration, transfer agent, and custody services to its existing collective investment funds (CITs), which have approximately $5.5 billion in assets as of December 31.

Wilmington Trust’s back office support will allow Franklin Templeton to focus on its strategic asset management and retirement priorities, while its affiliated trust company, Fiduciary Trust International of the South, a Florida chartered trust company, remains the trustee for the funds.

Wilmington Trust and Franklin Templeton Investments have launched additional trusts in strategies that have strong demand from retirement plan advisers and their clients like Templeton Foreign and Franklin Growth.

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“It’s an exciting time to be in the retirement plan industry as advisers, asset managers, and plan sponsors search for investment vehicles that meet their unique needs,” says Rob Barnett, administrative vice president and head of Retirement Distribution at Wilmington Trust. “We’re thrilled to continue to support the growth of collective investment funds as a critical investment vehicle for 401(k) retirement advisers and plan sponsors.”

Ryan Labs Releases Strategy for Corporate and Public Pensions

Ryan Labs Asset Management Inc. (Ryan Labs), a Sun Life Investment Management company, has announced the launch of their Defensive Risk Premia (DRP) strategy for corporate and public pension plans, as well as other institutional investors. This strategy is designed to enhance the defensive role the fixed income allocation plays within the total asset allocation of an institutional investor’s portfolio and to further offset losses from equity market downturns.

Despite recent market fluctuations, the current nine-year equity bull market remains one of the longest in history without a major correction. Using a proprietary quantitative model that monitors financial and economic risk on a daily basis, the DRP strategy is designed to turn on when elevated equity risk is indicated and there is a flight to quality into safe haven assets. Using treasury futures contracts, the strategy aims to dynamically offset negative equity performance of market volatility. 

In addition to Ryan Labs fixed income strategies, the new DRP strategy is available to institutional investors in various vehicles to suit their individual needs.

“Building on the momentum of our successful fixed income solutions—from total returns, to liability driven investments, to overlay strategies—our Defensive Risk Premia strategy reinforces our deep expertise and relentless focus on alpha-generating strategies,” says Richard Familetti, president and CIO, Ryan Labs. “The DRP strategy brings our strengths in managing underlying fixed income assets with overlay and quantitative analysis to provide a unique solution to institutional investors.”

TriLine Issues Energy-Related ETF

TriLine Index Solutions, an affiliate of BP Capital Fund Advisors, has announced the launch of the NYSE Pickens Oil Response exchange-traded fund (ETF).

The ETF—named BOON—aims to redefine energy investing by offering a more modern and enhanced way to obtain exposure to energy, and tracks the performance of the NYSE Pickens Oil Response Index, which is owned and administered by ICE Data Indices, LLC.

The Index is comprised of equities highly correlated to energy, based upon the price of the global benchmark for oil, ICE Brent Crude.  It includes not only traditional energy companies, but also firms that are “energy-intensive” end users of energy who have the potential to benefit from the abundance of U.S. supply as well as growing global demand for energy. The inclusion of end users is intended to lessen the effect of the “boom and bust” nature of commodity cycles and attempts to mitigate downsize capture while preserving upside capture.  The Index is equally-weighted and reconstitutes annually while rebalancing quarterly. 

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