Here is a roundup of some of the important stories that were trending last month in the financial services industry.
IPO Fever Continues
The wave of initial public offerings (IPOs) continues to grow, with WeWork announcing on April 29 that it will become a publicly traded company. WeWork, which offers shared workspaces for startups, joins a list of several large, “new economy” companies that have gone public over the past few months, including ride-sharing company Lyft, online pin board service Pinterest and video conferencing provider Zoom Video Communications. The biggest of them all, ride-sharing operator Uber, is expected to begin trading on the New York Stock Exchange in the coming weeks, with a valuation of between $80 billion to $91 billion. If you’re interested, check out this New York Times article to learn more about Uber’s IPO.
Global Economy To Grow In 2020
The world’s leading finance officials expect economic growth to increase in the second half of this year and in 2020. Officials of the Group of 20, which represents the largest economies around the world, pointed to looser central bank monetary policies as a key contributor to improved business activity. The International Monetary Fund forecast economic growth of 3.3 percent for this year and 3.6 percent in 2020. The growth, however, could stall if global trade tensions rise and central banks tighten monetary policy.
One Third Of Clients To Change Financial Advisors
The wealth management industry can expect one third of clients to change advisors over the next three years, according to EY’s newly released 2019 Global Wealth Research report. EY, one of the world’s largest accounting firms, interviewed 2,000 wealth management clients in 26 countries for the report. Other key findings include:
- The number of clients using independent advisors (instead of wealth managers with money management powerhouses) is expected to rise 18% over the next three years, with EY citing “the flexibility in the solutions and fees” making it “more attractive to clients.”
- More customers will switch to fintech providers (robo advisors and online personal financial management tools), increasing from 38 percent today to 45 percent.
- More clients will rely on mobile apps to monitor their wealth (up to 41 percent of clients compared to 20 percent in 2016).
Financial Services Industry To Benefit From FCC 5G Auction
The Federal Communications Commission (FCC) last month took another step forward to accelerate the rollout of 5G wireless services. The agency announced it will hold a third auction of 5G spectrum on December 10 and that it will create a $20 billion fund to help finance 5G broadband deployment in rural communities. 5G, short for the fifth-generation cellular networks, will deliver lightning-fast services – such as downloading entire movies in seconds – and will have a significant effect on the financial services industry. The technology will help banks, wealth management providers and other financial services companies create online and mobile platforms that provide customers with newer and more secure on-demand services. Check out this American Banker article for more information.
Bank Of America Joins List Of Banks Increasing Minimum Wage
Bank of America has joined the ranks of companies increasing hourly wages. The financial services giant announced last month that it will raise the minimum wage for its employees to $20 by 2021. Hourly pay will be $17 per hour starting May 1, 2019 and will increase yearly until it reaches the higher rate two years later. In a written statement, Sheri Bronstein, Bank of America’s chief human resources officer, said the company made the decision “because we believe that to best serve our customers and clients, we need the best teams.” Other banks have already announced increases in pay, including JPMorgan Chase, which earlier this year said it would be raising its minimum wage to between $15 and $18 an hour for 22,000 employees.