FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Vanguard is now king of target-date funds (Wealth Management)
Vanguard has surpassed Fidelity as the largest target-date fund provider. The mutual fund giant now controls 27% per cent of the space with $US193 billion in assets under management. Fidelity fell from the top spot after seeing a net outflow of approximately $US7.7 billion to in 2014. T. Rowe Price held the third spot. According to Morningstar, the top three hold 71% of market share.
The states with the most audits (Financial Planning)
The April 15 tax deadline is soon approaching, and that means audit notices will be coming. TaxAudit.com studied 1.4 million 2013 tax filings, and concluded filers living in California, Colorado and Nevada were the most likely to be audited by the Internal Res venue Service. As for state filings, citizens of New York and Massachusetts see the most audits from their states.
Fidelity is helping advisors get rid of unwanted clients (Investment News)
Fidelity’s Clearing and Custody division and registered advisory firm FirstPoint Financial are teaming up to help advisers clear their books of unwanted clients. FirstPoint Financial will pay advisers 35 basis points on all revenues earned for the year, giving advisers an option to part ways with those clients who they feel are no longer a good match for their services. One group in particular that is likely to get passed off is millennials, as they have yet to amass a large amount of savings. Investment News reports, “A 2014 Millionaire Outlook study by Fidelity found that 76% of financial advisers focus their business on clients who are 49 years or older, or those with $US1 million or more in assets to invest.”
Many investors don’t know how much they are paying in fees (Financial Advisor)
A survey conducted by the North American Securities Administrators Association (NASAA) showed approximately one-third of investors are unaware of the fees they are being charged by their brokers. Financial Advisor notes while most customers would like to see a breakdown of the fees, “less than 10 per cent of customers said this easy-to-grasp display of expenses is available to them.” The NASAA announced it will work with the Financial Industry Regulatory Authority, the Securities Industry and Financial Markets Association, the Financial Services Institute and representatives of broker-dealer firms to establish a framework to standardize the process.
Pacific West Capital charged with life settlement fraud (Think Advisor)
The Securities and Exchange Commission has charged Pacific West Capital with fraud for its role in the sale of $US100 million worth “life settlement” investments. According to the SEC, Pacific West Capital, and its owner, Andrew B. Calhoun IV, defrauded investors by using the proceeds from its sale of “life settlement” products to fund investments sold previously. Think Advisor says “Pacific West and Calhoun did not disclose this practice to investors and undertook it to make life settlement investments appear successful when, in fact, Pacific West had used up the primary reserves to pay premiums on those policies.”
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