FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Guiding Clients Who Give To Adult Children (WSJ)
More than ever, financial advisers are pushing clients to stop helping out their “less-well-off” children, reports the WSJ’s Corrie Driebusch. “Boomers and those somewhat older are feeling they’d really like to give their children and grandchildren the means to enjoy the lifestyle they feel they may not be able to achieve on their own,” UBS adviser Harold Elish told the Journal.
A recent U.S. Trust survey showed that 70% on respondents older than 68 are “providing substantial financial support for their adult children,” according to the Journal.
Morgan Stanley’s Unveils A Big Bullish Forecast For The S&P 500 (Morgan Stanley)
Morgan Stanley strategist Adam Parker made a big call today. He’s now targeting the S&P 500 at 1840 “looking 12 months forward,” implying a 12% upside from where we are now. Historically, Parker has been one of the more cautious voices on the Street. “We have argued in the past that it is extremely difficult to forecast the market multiple,” Parker wrote in the note to clients. “Even knowing major economic results a year before everyone else would barely aid in this regard. As such, we are left to guess at what might cause changes to the market multiple.”
Parker also points to how on average (from 1976 to 2012) earnings expectations fall as a year progresses.
BEIGE BOOK: The Economy Is Growing, But Lending Has Weakened ‘A Bit’ (Business Insider)
The Federal Reserve released its monthly Beige Book this afternoon, a collection of anecdotes from the central bank’s regional arms. In the report, the Fed says it saw “modest to moderate growth” across the nation. The language was fairly in line with economist expectations. Lending activity weakened, however, with Chicago reporting “recent interest rate increases likely were depressing commercial investment.”
Marc Faber: 3 Reasons A Crash Is Coming (Think Advisor)
Long-time bear Marc Faber warns, once again, of impending doom. Reason 1: Faber believes the US will “follow emerging markets down.” Faber thinks the pool of money in US stocks can head right back into EM as easily as it left. Reason 2: The Middle East is a “powder keg.” Faber believes consternation in Syria and Egypt will crush markets. Reason 3: Interest rates have doubled on the US 10-year since its July 2012 low. Rates are now a “headwind,” Faber argues.
Is It Time For Clients To Rethink Their Retirement Age? (Financial-Planning)
Financial adviser Brian Rezny has to tell his policeman and firefighter clients to adjust their retirement expectations. “They come in making $US100,000 a year with $US1.2 million in their drop program (403 B plan), and they think they’re all set to retire at 55”, Rezny told Financial-Planning’s Elliot Kass. “But if they need $US60,000 a year to live on, that simply won’t work with inflation.” Rezny advises many clients with lofty retirement plans to cut back on expenses, seek reverse mortgages, stay on the job, or make the switch to part-time work.
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