September / October 2026 • www. fa-mag. com

KNOWLEDGE FOR THE SOPHISTICATED ADVISOR

The Recruitment Arms Race

LPL’ s Commonwealth purchase was the starting pistol.

Nick Murray On Markets And Temptation

The idea of outperformance offers a sinister lure.

10 Critical AI Realities

What to know before you start prompting those bot buddies.

Advisor And Client Appetite For Long-Short Appears Insatiable

STOCK MARKET CORRECTION IN THE FINAL FOUR months of 2026 is certainly a possibility but, barring that event, the S & P 500 is likely to end the year posting four consecutive annual double-digit advances in a row. Advisors don’ t need to be told that the last time this occurred was in the late 1990s— but clients might need to be reminded.

Parallels between the world today and three decades ago are inevitable, but so are the differences. The market and the economy today are dominated by giant tech companies that are well-established and hugely profitable. Rivaling the giants among the Mag 7 are a handful of emerging tech companies, such as SpaceX and Anthropic, that are going public with similar valuations. But there are far fewer silly IPOs today like there were in the Pets. com era.

Both periods experienced massive wealth creation, but in the 1990s there was a general perception that a rising tide was lifting all boats. Today, wealth disparity is a major social issue in a way it wasn’ t then. The retiring World War II generation was revered back then. These days, baby boomers, with more wealth than any generation in history, are resented in many quarters.

Sooner or later, there will be a more extended bear market than investors experienced in 2020 or 2022. At Financial Advisor’ s annual Invest in Women event in April, Schwab chief investment strategist Liz Ann Sonders voiced concern that the negative wealth effect from a longer stock market downturn could be serious.

After all, she noted, there were few fundamental reasons besides the tech bubble bust for the 2000-2001 recession, but that recovery was surprisingly soft. Today’ s mountain of equity wealth is many times the scale of that period, and an aging economy now seems significantly more dependent on it for consumer spending.

Parallels between the world today and three decades ago are inevitable, but so are the differences. The market and the economy today are dominated by giant tech companies that are well-established and hugely profitable.

Custodians are throwing up guardrails, but the surge toward margin-enhanced, tax-aware strategies shows little signs of stopping.

Another thing differentiating the two eras is the popularity of Wall Street’ s latest hot product for advisors and their clients: tax-aware, long-short separately managed accounts. As senior writer Jennifer Lea Reed chronicles in this month’ s cover story, demand for these tax-loss-generating accounts is so high that custodians are overwhelmed.

The shiny objects investors are seduced into chasing often change, but human nature never does. That’ s why we chose to run an article on the temptation of outperformance by an old friend, Nick Murray, on page 16. It was written in 2015 and is excerpted from his new book, All the Things That Never Change, and it’ s as timely today as it was a decade ago.

Advisors hopefully are wise enough to know that market timing rarely works, but even so, clients need to be prepared for a very different financial world than what they’ ve witnessed over the last 15 years.

Evan Simonoff

Email me at esimonoff @ famagazine. com with your opinion.

6 | FINANCIAL ADVISOR MAGAZINE | SEPTEMBER / OCTOBER 2026 WWW. FA-MAG. COM