FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Presidential candidates will need to address Social Security (Investment News)
The first Republican Presidential debate takes place Thursday evening. While the topics aren’t revealed ahead of time, what to do about the Social Security will surely be discussed at some point during the election process. Candidates’ opinions on the issue range from Jeb Bush calling for no changes for those currently receiving benefits to Rand Paul suggesting the full retirement age should be raised to 70 to Chris Christie saying benefits should be reduced if a retiree meets certain income thresholds.
What if everyone’s wrong about the dollar? (Business Insider)
The consensus believes the Federal Reserve will raise rates in 2015 and the US dollar will continue to strengthen as a result. Credit Suisse says their house view is for further appreciation of the dollar, and supports its view with survey results showing 70% of investor clients agree. Interestingly, the investment bank’s call goes against its research. “The dollar has historically fallen after the first Fed rate hike; indeed, the first rate hike on the last five tightening cycles was associated with a dollar weakening by around 10% over the following three months,” noted Andrew Garthwaite, Managing Director and Global Equity Strategist of Credit Suisse in the Investment Banking Division, based in London.
Outflows continue for Pimco’s flagship fund (Bloomberg)
Pimco’s flagship fund, the Total Return Bond Fund, just saw its 27th straight month of outflows. Investors pulled $US2.5 billion from the fund in July, lowering AUM to $US101 billion. The fund is just a shell of its former self as AUM have cratered 66% from the $US293 billion in April 2013.
Think Advisor reports, Senator Elizabeth Warren, D-Mass., has revealed legislation that would prohibit potential employees from disclosing their credit history during the interview process. “Families have not fully recovered from the 2008 financial crisis, and too many Americans are still searching for jobs. This is about basic fairness — let people compete on the merits, not on whether they already have enough money to pay all their bills,” Warren said as she introduced the bill on the Senate floor. The Senator also made note of a Federal Trade Commission report, which highlighted errors in the credit reporting process.
LPL’s regulatory costs fall (Financial Planning)
LPL Financial announced earnings of $US0.65 per share, topping Wall Street estimates by a penny. Revenue slipped 0.2% to $US1.09 billion, which was just shy of the $US1.1 billion that analysts were expecting. The company reported regulatory expenses fell to $US6.7 million, down 39% from the first quarter and 16% from a year ago. “We’re at the point where we are reasonably confident that going into 2016 regulatory expenses will be down substantially,” said Tom Lux, LPL’s acting CFO.
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