Charles Schwab is raising the minimum account balance for a tax-smart strategy favored by investment advisors who use Schwab's trading platform. Starting Sept. 16, investors who want to take advantage of Schwab's long/short separately managed accounts will need minimum balances of $10 million, up from the current minimum of $1 million. Schwab says the change will affect only new accounts, not existing ones. The SMAs can help clients with concentrated positions limit their tax liabilities.
Among other most-read wealth management articles this week:
Wealthfront passes a milestone. Wealthfront reported earnings that were mildly ahead of Wall Street's expectations, but it impressed analysts with evidence that it is becoming more than just a robo-advisor. Citizens analyst Devin Ryan noted that apart from the "relatively small financial upside" Wealthfront reported, the firm's earnings report showed "several encouraging updates around client behavior." Chief among those was Wealthfront's announcement that assets on its platform for the first time exceeded $100 billion.
Investors feel more risk averse. For the first time since April, Charles Schwab's measure of trading activity fell in August, indicating that investors are feeling less bullish and more risk averse about the markets. The Schwab Trading Activity Index, or STAX, slipped 3.85% in August, in contrast to the 2.96% increase the S&P 500 saw during the month. The report found that traders were net buyers of stocks such as Space Exploration Technologies, Micron, and Nvidia, while on balance they sold positions in companies such as Palantir Technologies, Microsoft, and Salesforce.
UBS' $2.6 billion hiring spree. UBS has hired three financial advisory teams away from rival firms, where they oversaw $2.6 billion in client assets. Two of the new hires came from Morgan Stanley; the other came from Merrill Lynch. The new advisors will expand UBS' wealth management presence in Colorado, Maryland, and Washington state.
Orion leans into AI. Orion, a provider of asset-management and technology services to investment advisors, is making big bets on artificial intelligence and other technology to support its users. Natalie Wolfsen, Orion's CEO, recently sat down with Barron's Advisor to discuss the company's trajectory under her three-year tenure and where it is heading. She says that Orion is in the midst of its largest-ever research-and-development initiative, most of which is focused on AI.
Merrill's recruiting hat trick. Merrill Lynch has hired financial advisor practices away from Morgan Stanley, Truist, and Wells Fargo, bringing in practitioners who managed a total of $1.7 billion in client assets with their former firms. The largest of the recruits is the Aliaskari Group in the Washington suburb of McLean, Va., which oversaw $1.2 billion in assets with Morgan Stanley. Merrill also hired Dylan Price, based in Charlotte, N.C., who managed $300 million with Truist, and Ronnie Murad, based in Charleston, W.Va., who oversaw $285 million with Wells Fargo.
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