FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Unorthodox ways to grow your business (Wall Street Journal)
Are you having trouble networking and picking up new clients? The Wall Street Journal spoke to some veterans in the industry about how to reach more perspective clients. One story focused on a veteran who would travel to a new neighbourhood and let his cat roam the streets. When a stranger picked the cat up he would find a collar saying, “Call this number if you find me.” From the Journal: “Inevitably, a good Samaritan with deep pockets would comfort the stray and contact the owner at work. The stockbroker feigned relief, gushed gratitude, and began the steady push for a new account.” A more traditional route is to ask clients for referrals. According John Anderson, a managing director at SEI Investments, 80% of advisor business comes from referrals, but only 1 in 6 clients remember being asked for any within the past year.
House votes to permanently repeal the estate tax (Think Advisor)
On Thursday, the US House of Representatives voted 240-179 in favour of repealing the estate tax. Following the vote, House Ways and Means Committee Chairman Paul Ryan stated, the nation needs to “fix our tax code to make it simpler, flatter and fairer to help build a healthy economy, the death tax is actually hurting our economy now and putting unnecessary pressure on families and small businesses. That’s not how the tax code should work, and that’s why we passed this bipartisan bill to permanently repeal the death tax.” It is not yet known if the Senate will vote on the bill.
Many people don’t know how much money they need to retire (Financial Advisor)
A survey conducted by Limra Secure Retirement concluded the majority of Americans don’t know how much money they will need to retire. According to Limra, 60% of Americans between the ages of 30 and 69 and 70% of Americans under the age of 30 are clueless as to the amount of money they need to save for retirement. Cecilia Shiner, associate research director of the Limra Secure Retirement Institute, notes, “If consumers aren’t confident that they are doing the basics correctly, like saving enough for retirement, it is unlikely that they will be confident of their retirement prospects.”
Former Merrill advisor trainees sue for overtime pay (Financial Planning)
Two former Merrill Lynch advisor trainees are suing Bank of America and its Merrill Lynch unit for violation of the Fair Labour Standards Act. The trainees claim they worked more than 60 hours per week, but were only compensated for working 40 hours. The lawsuit was filed as a class action, meaning anyone who worked in the training stage since August 5, 2011 is eligible to join. According to the suit filed in Manhattan, the group is seeking more than $US5 million.
According to Investment News, “An estimated 3.7 million businesses in the U.S. are owned by husband-and-wife teams.” With American’s divorce rate hovering at around 50%, it would be expected that family owned businesses had contingency plans in case of a divorce, but often times that is not the case. The publication stresses the importance of reaching an agreement that will “enable both the remaining spouse/business owner and the departing partner who has been bought out to support themselves and fund their retirement.” Selling the business outright should be the last resort.
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