Advisers Make Critical Mistakes With Millennial Women Clients

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Advisers Make Critical Mistakes With Female Millennials (Investment News)

Female millennials are going to earn way more and will take greater roles in household financial decisions than did past generations. However, some advisers often end up inadvertently alienating female millennials.

One major mistake that advisers make is focusing only on long-term financial goals, like retirement. Nowadays, because women are taking greater financial responsibilities, they have short-term financial goals to achieve as well, like merging finances after marriage.

Additionally, advisers are sometimes inaccessible to women. Advisers need to be more flexible and available on social media platforms, writes Mary Beth Storjohann.

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Investors Need To Start Thinking About Risk Tolerance Differently (Financial Planning)

The typical approach to risk tolerance involves looking at two factors: the client's attitude toward risk and his or her financial ability to do so. For example, if a client has "positive attitudes" toward risk and has the financial ability to take risks, financial advisers put together an aggressive portfolio.

The problem with this, however, is that there is a difference between a client's attitude toward risk and his or her need to take it. "As a result, wealthy clients who don't want or need risk are still given (unnecessarily risky) moderate growth portfolios," and "young clients who have a long time horizon but no desire for risk end up with equity-centric portfolios that may scar them for life," Michael Kitces writes.

Investors Should Retool Their Bond Exposure (Alliance Bernstein)

"It's certainly going to be a more challenging world for fixed income," Alison Martier writes. "As with many segments of the global markets today, there aren't many broad swaths of the bond market that are still cheap. This should keep bond returns generally modest going forward."

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However, fixed income isn't dead. The key for investors is to increase global exposure (except in currency) in their portfolios. Additionally, "investors should diversify credit exposure across the broad set of market segments, including traditional high yield, emerging market debt and even investment-grade credit."

And finally, investors should manage liquidity risk. "The cost of liquidity expands or contracts based on market conditions. In times of stress, liquidity costs are higher," Martier adds.

Look At Both Large Cap And Global Stocks Following Last Week's Sell-Off (BlackRock Blog)

"The recent sell-off is a mid-cycle correction rather than the start of a bear market and, as such, I'd maintain exposure to global equity markets," Russ Koesterich writes. "If anything, the recent drop in interest rates, coupled with the decline in stock valuations, provides an even more compelling case for the asset class as offering better long-term return prospects than bonds."

Additionally, investors should look at large and mega-cap stocks, because these market segments have recently done better than the small- and mid-cap ones. Additionally, large-cap and mega-cap stocks have a better cushion for volatility.

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Morgan Stanley Just Hired 5 Advisers From Merrill, UBS, And JPMorgan (The Wall Street Journal)

Morgan Stanley just went on a major hiring spree and added five advisers to the firm. The hires, who come from Merrill Lynch, UBS, and JPMorgan, managed more than $565 million in client assets at their previous firms.

Michael Wursthorn reports that the new hires will join various offices including Hartford, Connecticut; Louisville, Kentucky; and Aventura, Florida.

Spokespeople declined to comment on the moves.