NEW YORK (Reuters) - Forecasts of a steady deterioration in profit at Merrill Lynch, Morgan Stanley , Wells Fargo Advisors and UBS Wealth Management Americas are highly exaggerated, analysts at Sanford C. Bernstein & Co. declared in a new report on Friday.
The brokerage giants have lost market share to smaller firms and independent advisers due to reputational damage to their parent banks during the financial crisis, but they still dominate and much of the slippage may have been strategic.
The wirehouses, as they are known, have dumped brokers who generate subpar revenue and are focusing on those who serve clients with investable assets of $1 million or more. Those affluent clients and the products they buy generate much higher profit than typical brokerage clients with $100,000 or more to invest.
The Bernstein analysts also debunked studies and press reports that cite the impending retirements of older clients and wirehouse brokers - the average age of top advisers based on assets they oversee is 60, Bernstein says - as reasons for a new generation of investors to bolt to smaller competitors.
"The demographic trends that will impact the industry over the next five years are entirely manageable or positive for the wirehouses," the analysts led by Brad Hintz wrote. "We believe that the wirehouse channel remains, and will remain, the most profitable portion of the North American full-service wealth management industry over the next five years."
The report comes amid a flow of studies over the last two years that track a small but growing number of wirehouse advisers leaving for independent brokerage firms such as LPL Financial Holdings. The smaller firms give them fewer services but a higher percentage of the revenue they produce. The studies also show more clients trusting their money to registered investment advisers, individuals who are usually paid a percentage of client assets they help oversee rather than commissions for sales of stocks, bonds and financial services.
A study released on Thursday, for example, showed that mutual fund and exchange-traded fund assets at independent brokers and RIAs grew 8.5 percent during the first quarter to $3.1 trillion compared to a 6.5 percent jump to $1.4 trillion at wirehouses. The totals exclude low-yielding money-market funds.
"Five years ago everyone in the fund industry focused on selling through the wirehouses," said Frank Polefrone, a senior vice president at Aces Data, which compiled the study with consulting firm Strategic Insight. "Over the past 18 months, we've seen these independent channels for advice-driven investors growing much more rapidly."
Hintz said in an email that numbers don't tell the whole story.
"I'm not certain the market share shift is unwanted," he wrote in an email. "The wirehouses have been shedding more advisers and more offices than assets overall, so they are increasing their margin and targeting a narrower client base. They remember what Willie Sutton said--'Go where the money is.'"
According to the report, the wealth management industry is on the rebound from a long slough that began in the financial crisis, and the biggest part of the growth is occurring among the wealthiest individuals.
Profit across all wealth industry channels, including discount brokers such as Charles Schwab and TD Ameritrade , will grow at a compound annual rate of 7 percent beginning this year, according to the Bernstein analysts. The wirehouses should prosper because they are selling "complex, higher margin products like alternative investment vehicles and structured products, giving them a significant profitability advantage over firms in other channels," it said.
Brokers at wirehouses and RIAs, on average, oversee more than $100 million of client assets, compared with about $65 million per broker at regional brokerage firms and $25 million at independent firms, according to the study.
Measured by client assets under custody, wirehouses overwhlem its competitors with about 34 percent of the market, followed by 13 percent to 14 percent in the other sales channels, according to the Bernstein study.
(Reporting By Jed Horowitz; editing by Linda Stern and David Gregorio)
Kaleidescape launched its online offering in beta late last year, and now it's officially open, becoming what it claims is the first store to provide "internet delivery of Blu-ray quality movies." The Kaleidescape Store goes beyond other 1080p services (Vudu, iTunes, Xbox and PSN come to mind) by promising the disc-equaling higher bitrates, extras and lossless audio options they don't have. There's no streaming to be had here, only downloads, with file sizes we saw ranging from 23GB (Austin Powers) to as much as 55.4GB (Inception) and everywhere in between.
While the store is only built to work with Kaleidescape's high-end disc-playback systems -- these usually start in the thousands of dollars, and you'll need M-Class hardware for HD -- it currently offers movies from Warner Bros. with an Ultraviolet copy attached, so buyers can play them back on mobile devices through apps such as Flixster and Vudu. Ultraviolet support also means $6.99 upgrades of DVD purchases to Blu-ray-quality HD, and potentially disc-to-digital type features later. Naturally, anyone interested will need an internet connection with a generous / non-existent bandwidth cap, but we imagine that's not out of the price range for these niche owners. Still, it does provide an idea of the difficulty others like Sony and Netflix will face when trying to digitally distribute feature films in 4K to a wider audience. Check out a few screens of the store in the gallery, and the Random Thoughts blog link below for firsthand impressions from a beta tester.
Troubling levels of toxic metals found in lipstickPublic release date: 2-May-2013 [ | E-mail | Share ]
Contact: Sarah Yang scyang@berkeley.edu 510-643-7741 University of California - Berkeley
Berkeley A new analysis of the contents of lipstick and lip gloss may cause you to pause before puckering.
Researchers at the University of California, Berkeley's School of Public Health tested 32 different lipsticks and lip glosses commonly found in drugstores and department stores. They detected lead, cadmium, chromium, aluminum and five other metals, some of which were found at levels that could raise potential health concerns. Their findings will be published online Thursday, May 2, in the journal Environmental Health Perspectives.
Prior studies also have found metals in cosmetics, but the UC Berkeley researchers estimated risk by analyzing the concentration of the metals detected and consumers' potential daily intake of the metals, and then comparing this intake with existing health guidelines.
"Just finding these metals isn't the issue; it's the levels that matter," said study principal investigator S. Katharine Hammond, professor of environmental health sciences. "Some of the toxic metals are occurring at levels that could possibly have an effect in the long term."
Lipstick and lip gloss are of special concern because when they are not being blotted on tissue or left as kiss marks, they are ingested or absorbed, bit by bit, by the individual wearing them, the study authors said. The researchers developed definitions for average and high use of lip makeup based on usage data reported in a previous study. Average use was defined as a daily ingestion of 24 milligrams of lip makeup per day. Those who slather on the lip color and reapply it repeatedly could fall into the high use category of 87 milligrams ingested per day.
Using acceptable daily intakes derived from this study, average use of some lipsticks and lip glosses would result in excessive exposure to chromium, a carcinogen linked to stomach tumors. High use of these makeup products could result in potential overexposure to aluminum, cadmium and manganese as well. Over time, exposure to high concentrations of manganese has been linked to toxicity in the nervous system.
Lead was detected in 24 products, but at a concentration that was generally lower than the acceptable daily intake level. However, the lead levels still raised concerns for young children, who sometimes play with makeup, since no level of lead exposure is considered safe for them, the researchers said.
The study authors say that for most adults, there is no reason to toss the lip gloss in the trash, but the amount of metals found do signal the need for more oversight by health regulators. At present, there are no U.S. standards for metal content in cosmetics. The authors note that the European Union considers cadmium, chromium and lead to be unacceptable ingredients at any level in cosmetic products.
"I believe that the FDA (Food and Drug Administration) should pay attention to this," said study lead author Sa Liu, a UC Berkeley researcher in environmental health sciences. "Our study was small, using lip products that had been identified by young Asian women in Oakland, Calif. But, the lipsticks and lip glosses in our study are common brands available in stores everywhere. Based upon our findings, a larger, more thorough survey of lip products and cosmetics in general is warranted."
###
Ann Rojas-Cheatham, director of research and training at the Asian Communities for Reproductive Justice in Oakland, Calif., co-authored the study. The National Institutes of Health and the National Institute of Occupational Safety and Health Education Research Center helped support this research.
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AAAS and EurekAlert! are not responsible for the accuracy of news releases posted to EurekAlert! by contributing institutions or for the use of any information through the EurekAlert! system.
Troubling levels of toxic metals found in lipstickPublic release date: 2-May-2013 [ | E-mail | Share ]
Contact: Sarah Yang scyang@berkeley.edu 510-643-7741 University of California - Berkeley
Berkeley A new analysis of the contents of lipstick and lip gloss may cause you to pause before puckering.
Researchers at the University of California, Berkeley's School of Public Health tested 32 different lipsticks and lip glosses commonly found in drugstores and department stores. They detected lead, cadmium, chromium, aluminum and five other metals, some of which were found at levels that could raise potential health concerns. Their findings will be published online Thursday, May 2, in the journal Environmental Health Perspectives.
Prior studies also have found metals in cosmetics, but the UC Berkeley researchers estimated risk by analyzing the concentration of the metals detected and consumers' potential daily intake of the metals, and then comparing this intake with existing health guidelines.
"Just finding these metals isn't the issue; it's the levels that matter," said study principal investigator S. Katharine Hammond, professor of environmental health sciences. "Some of the toxic metals are occurring at levels that could possibly have an effect in the long term."
Lipstick and lip gloss are of special concern because when they are not being blotted on tissue or left as kiss marks, they are ingested or absorbed, bit by bit, by the individual wearing them, the study authors said. The researchers developed definitions for average and high use of lip makeup based on usage data reported in a previous study. Average use was defined as a daily ingestion of 24 milligrams of lip makeup per day. Those who slather on the lip color and reapply it repeatedly could fall into the high use category of 87 milligrams ingested per day.
Using acceptable daily intakes derived from this study, average use of some lipsticks and lip glosses would result in excessive exposure to chromium, a carcinogen linked to stomach tumors. High use of these makeup products could result in potential overexposure to aluminum, cadmium and manganese as well. Over time, exposure to high concentrations of manganese has been linked to toxicity in the nervous system.
Lead was detected in 24 products, but at a concentration that was generally lower than the acceptable daily intake level. However, the lead levels still raised concerns for young children, who sometimes play with makeup, since no level of lead exposure is considered safe for them, the researchers said.
The study authors say that for most adults, there is no reason to toss the lip gloss in the trash, but the amount of metals found do signal the need for more oversight by health regulators. At present, there are no U.S. standards for metal content in cosmetics. The authors note that the European Union considers cadmium, chromium and lead to be unacceptable ingredients at any level in cosmetic products.
"I believe that the FDA (Food and Drug Administration) should pay attention to this," said study lead author Sa Liu, a UC Berkeley researcher in environmental health sciences. "Our study was small, using lip products that had been identified by young Asian women in Oakland, Calif. But, the lipsticks and lip glosses in our study are common brands available in stores everywhere. Based upon our findings, a larger, more thorough survey of lip products and cosmetics in general is warranted."
###
Ann Rojas-Cheatham, director of research and training at the Asian Communities for Reproductive Justice in Oakland, Calif., co-authored the study. The National Institutes of Health and the National Institute of Occupational Safety and Health Education Research Center helped support this research.
[ | E-mail | Share ]
?
AAAS and EurekAlert! are not responsible for the accuracy of news releases posted to EurekAlert! by contributing institutions or for the use of any information through the EurekAlert! system.
You know what's a turn on? Oysters. You know what's a turn off? Vomit. Oysters might be a delicious aphrodisiac, but they have a tendency to be pretty unsanitary and they can make you sick. But researchers at Texas A&M University have found a way pasteurize the bivalves using electron beams, getting rid of some of the stuff that causes you to upchuck.
Some of the common pathogens found in oysters are Hepatitis A, Vibrio vulnificus, and norovirus, aka some of the common causes of food poisoning and the stomach bug. Oysters are usually cleaned by heating, freezing, or applying high pressure to combat the grime, but that's not always effective. That's where electron pasteurization comes in.
Lead researcher Dr. Suresh Pillai says a unpasteurized serving of 12 oysters could typically harbor around 100 Hepatitis A and noroviruses. When treated with a 5 kilogray electron beam dose, the Hepatitus A risk is reduced by 91 percent and the norovirus risk is lessened by about a quarter, Pillai says. A kilogray is a unit of absorbed energy of ionized radiation.
The use of electron beam technology to kill pathogens is FDA-approved, but it's not being used in commercial oyster processing. But considering how effective it was in this study, maybe we can count on cleaner oysters next time we're on the hunt for a hangover cure. [Discover via ArgriLife]
BERLIN, April 29 (Reuters) - Barcelona will try every trick in the book to overturn a 4-0 first-leg deficit against Bayern Munich in their Champions League semi-final return leg on Wednesday, honorary Bayern president Franz Beckenbauer warned on Monday. Bayern crushed the Spaniards last week in a surprisingly one-sided encounter but Beckenbauer, former player, coach and president of Germany's most successful club, warned that Barcelona were not ready to surrender. "Barca will try everything to throw Bayern off balance," he told Bild newspaper. ...
WASHINGTON (Reuters) - With his fight for tighter gun control measures defeated and prospects for a deficit reduction pact dim, President Barack Obama sought on Tuesday to project an image of a leader still in control of a faltering domestic policy agenda.
At a surprise news conference, Obama made the case that recent defeats did not mean he was a lame-duck leader, and said he was hopeful immigration reform would become law.
"As Mark Twain said, you know, rumors of my demise may be a little exaggerated," the president told reporters at the White House when asked whether he had "the juice" to push his policy priorities through Congress.
Obama started off his second term this year with energetic promises to tackle climate change, reduce gun violence, push immigration reform, and fix the budget.
But so far, many of his initiatives have fallen flat. Modest changes to background checks for gun buyers failed in the U.S. Senate, and across-the board spending cuts known as "sequester" went into effect despite efforts by the Obama administration to stop them.
The president noted on Tuesday that the United States had a divided government with Republicans controlling the House of Representatives and the Democratic-controlled Senate requiring 60 out of 100 votes to pass legislation.
"Despite that, I'm actually confident that there are a range of things that we're going to be able to get done," he said.
"I feel confident that the bipartisan work that's been done on immigration reform will result in a bill that passes the Senate, passes the House, and gets on my desk. And that's going to be a historic achievement."
Both political parties have an incentive to pass immigration reform after Hispanic voters supported Obama overwhelmingly in the 2012 election.
Obama praised a Senate version of the bill and said he would keep an open mind to a similar, perhaps more conservative, version in the House as long as it met the criteria of strengthening border security and creating a pathway for undocumented workers to become citizens.
"If they meet those criteria, but they're slightly different than the Senate bill, then I think that we should be able to come up with an appropriate compromise," he said."
"If it doesn't meet those criteria, then I will not support such a bill."
LEGACY, BUDGET WOES
Political observers generally say the president has roughly a year before focus in Washington turns to the 2014 mid-term elections, rendering him less able to dominate the agenda.
Broad immigration reform this year would give Obama a policy victory that would help define his legacy.
A major deal on the deficit is less likely.
Obama said he would continue to reach out to lawmakers in the opposing party to work on an elusive deficit deal, but he did not indicate a great deal of optimism that a broad agreement was possible.
"I've had some good conversations with Republican senators so far. Those conversations are continuing," he said, referring to recent dinners he has had that some have dubbed a charm offensive.
"I think there's a genuine desire on many of their parts to move past not only sequester but Washington dysfunction. Whether we can get it done or not, we'll see."
The president seemed to show some vindication over the recent uproar over the economic effects of the sequester cuts after taking criticism earlier this year for overselling how damaging they would be.
"The notion was somehow that we had exaggerated the effects of the sequester - remember?" Obama said.
"What we now know is what I warned earlier ... is happening. It's slowed our growth. It's resulting in people being thrown out of work. And it's hurting folks all across the country."
(Reporting by Jeff Mason; Editing by David Brunnstrom)
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