Category Archives: oud
Why FAs Should Hedge Against Declining AUM: Financial Advisors’ Daily Digest
If a market downturn shrinks your AUM and your clients flee to cash (thus, further reducing your fee basis), you’re looking at a serious reduction in revenue. SA contributor Robert Boslego puts it this way: “Although RIAs with AUM revenue models rarely think that they are in the commodity business, their income fluctuates with asset prices just as an oil producer’s revenues fluctuate with oil prices.” While not predicting the timing of the next downturn, Boslego suggests advisory firms can take actions now to protect against this revenue-jeopardizing eventuality . Indeed, your humble digest editor has in like fashion hedged against his own impending absence during the upcoming Passover holiday by recruiting the resourceful and talented Robyn Conti , who has graciously volunteered to supply advisors with relevant links over the course of the next week. If you are not already subscribed to Robyn’s feed, please do so now – if for no other reason than to receive her own highly engaging bimonthly digest addressing income issues. Below, please find links of interest to advisors, starting with a fascinating post on the transition from accumulation to distribution that we discussed yesterday (you might want to check out all the interesting reader comments):
Verizon Revenue Misses, Warns Strike May Hit Q2 Profit
Verizon Communications ( VZ ) early Thursday reported in-line Q1 EPS but its revenue missed Wall Street views. The phone company reiterated guidance for flat full-year adjusted earnings. Verizon said current-quarter profit could be pressured by the strike of 39,000 wireline workers, which began April 13. Verizon said Q1 profit rose 4% to $1.06 from the year-earlier period, with revenue rising less than 1% to $32.17 billion. Analysts had modeled revenue of $32.46 billion. Excluding AOL, acquired in June 2015, Verizon said Q1 revenue fell 1.5%. Wireless revenue fell 1.4% to $22 billion. Verizon, which has stated its interest in acquiring Yahoo ( YHOO ), had $104 billion in net debt as of March 31, down slightly from $109 billion a year earlier. Verizon said it had a net loss of 8,000 postpaid phone subscribers, far less than the 138,000 postpaid phone customers shed in the year-earlier period. The company said it added 36,000 FiOS video customers in Q1, down from the 90,000 added in Q1 2015. It added 98,000 FiOS Internet customers, down from 133,000. In early April, Verizon closed a deal to sell wireline assets in California, Florida and Texas to Frontier Communications ( FTR ) for $10.5 billion. Verizon stock was down 2% in premarket trading Thursday, near 52. Verizon stock touched a 16-year high of 54.49 on April 5. Top rival AT&T ( T ) is slated to report its Q1 earnings on April 26.