5 Smart Insights For Financial Advisors

FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.

The Sequester Will Hit Markets Hard, Eventually (Business Insider)

Even though markets don't seem to be reacting to the sequester, which kicked in today, they're eventually going to feel the squeeze. Many economists feel that the sequester will be harmful to the economy, and that in turn, will depress markets.

This is reminiscent of Japan, which saw several rounds of "premature tightening" and corresponding downturns in the market.

Medicaid Trusts Are Popular With Older Investors (The Wall Street Journal)

Middle-class investors between 50 and 60 are turning to Medicaid trusts to protect their assets, and those of their children, from being used to pay for care. Advisors are recommending that clients get an attorney and then transfer some or all of their assets into a trust, after which the client would meet the guidelines to become eligible for Medicaid.

"The trusts have become more popular — that's an awful lot of Middle America affected by the high cost of nursing-home care," Robert M. Geurden, a partner at law firm Brier & Geurden, told the WSJ.

But starting next year the rule for Medicaid eligibility is set to change, and will be based on income, not assets, for those under 65.

Volatility In Foreign Exchange Markets Is An Ominous Indicator (Société Générale)

The last time foreign exchange market volatility spiked from ultra-low levels like it is right now, the financial crisis hit. When Business Insider asked Société Générale's senior Forex strategist Sebastien Galy what he is really worried about, he showed us this chart:

It's Not Too Late To Buy Into The Stock Market (Advisor Perspectives)

After years of money flowing from equities to bonds, the tide began to turn as mutual fund investors bought back into the stock market, driving prices even higher. The Dow has surpassed its pre-crisis high, and the S&P 500 is trading 125 percent higher than its bottom in 2009. But it's still not too late to buy back into the stock market, according to Alliance Bernstein's Seth Masters.

"While the market may temporarily retrace some of its recent gains, we think it still offers good — if below-average — long-term return potential, with international stocks somewhat more attractively priced than their U.S. counterparts," said Masters.

Investment Tech Isn't Good Enough For Most Clients (Financial Planning)

When it comes to making investment decisions, the technology used by financial advisors just doesn't measure up for most clients, according to a new report by SEI Advisor Network.

“Investors can find their account balances anywhere,” Kevin Crowe, SEI's head of solutions told Financial Planning, “We found they want their advisors’ technology to help identify clients’ goals, create plans, and show what progress is being made towards meeting those goals.”

However, investors are reasonably happy with their financial advisor's use of technology in managing their investments, according to the report.