FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Healthcare costs can alter retirement plans (Investment News)
For years financial advisors have been assuming inflation of 2.5-3.0% per year when determining their clients’ retirement budgets. However, Investment News says that assumption is underestimating their costs because the Centres for Medicare & Medicaid Services is projecting healthcare costs will rise by approximately 6% per year over the next decade. The higher cost of healthcare, coupled with longer life expectancies, are causing advisors and clients to rethink their retirement planning.
Legal costs will rise for investment banks (Business Insider)
A note from Morgan Stanley says US investment banks are likely to see another $US14 billion in fines before 2017. According to the report, US banks have weathered the worst of their fines, but European banks just entering the eye of the storm. Those banks are expected to see $US50 billion in penalties through year-end 2016.
Investment banks are forming a data company (Wall Street Journal)
The Wall Street Journal reports Goldman Sachs, JP Morgan and Morgan Stanley are joining forces to create a data company that will clean and store reference data at a lower cost. The new project is being called Securities Product Reference Data, or “SPReD,” and is scheduled to launch within the next year. The initiative is the latest example of banks working to together to keep costs under control. All three banks are said to have invested “seven figures” in the project, according to the WSJ.
SEC fines advisor for misleading clients (Financial Advisor)
The US Securities and Exchange Commission has fined Jacob Cooper $US2.6 million dollars and barred him from the financial services industry for misleading clients and not conducting proper due diligence. Financial Advisor says Cooper invested most of his clients’ $US90.2 million in the Atlus fund family and failed to disclose he controlled the funds and was receiving consulting fees from those funds. According to the SEC, most of the investors’ money was eventually lost.
There is a new data option for financial advisors (FierceFinanceIT)
eVestment recently launched a product aimed at providing institutional intelligence and data to the financial advisor community. “If you look at institutions and their data and asset flows, they are placing tens of millions, sometimes billion dollar trades and that’s what’s moving the markets. By the time that financial advisors get access to mutual fund data, they have already missed the big trades,” said Larry Shumbres, vice president of business development for the new product area. The product will provide data on private equity funds beginning in October.
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