FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Women beat men at investing (SigFig)
Robo advisor SigFig says women earn higher returns than men. In 2014, women returned 4.7%, edging out the 4.1% gain for men. Annualized this track record over 30 years, women would return an extra $58,000 on a $100,000 investment, according to SigFig. Men were also more likely to lose money than women (25.8% to 20.4%), and had a higher turnover (15% to 9%). Interestingly, 17% of men think they can “beat the market,” compared to only 11% of women.
The Bank of Japan is going to buy more ETFs (Business Insider)
At Friday’s meeting, the Bank of Japan kept the size of its quantitative-easing program unchanged at around 80 trillion yen per year, but it said it would increase its ETF and REIT purchases, and it extended the maturities on its bond purchases. The BOJ will “purchase exchange-traded funds (ETFs) and Japan real-estate investment trusts (J-REITs) so that their amounts outstanding will increase at annual paces of about 3 trillion yen and about 3.2 trillion yen respectively.” In addition, the central bank will extend the maturities on its Japanese Government Bond purchases to seven to 12 years, from seven to 10 years, from the beginning of 2016. The changes came at a vote of 6 to 3.
Tips for financial health in 2016 (TransUnion)
Ken Chaplin, a senior vice president at TransUnion says doing these things will give you financial health in 2016. First, create a monthly budget so you know how much you need to pay off your financial commitments. Next, lock your credit to protect against identity theft. Also, be aware that your selfie stick or drone could be used by identity thieves to steal your information. Finally, if you’re thinking about buying a house, check out your credit score and take the necessary steps to boost your rating before the spring.
Wells Fargo wants advisors to get rid of their smaller clients (Wealth Management)
Starting in 2016, Wells Fargo wants advisors to hand over their clients with less than $65,000 in household assets to financial relationship advisors. According to Wealth Management, Wells believes those clients are better suited for advisor trainees who are just getting their feet wet in the industry and need experience building client relationships. The hand off would allow advisors more time to work with their high net-worth clients. For their smaller clients, advisors would be compensated with “the greater of either the 12-month trailing gross production on the household or 40 basis points on the assets of the account,” Wealth Management says. To entice advisors from handing over their smaller clients, Wells is offering a bonus if at least 75% of an advisor’s clients have at least $250,000 in assets.
JPMorgan will pay more than $300 million for failing to disclose its preference of its own products. Investment News reports, JPM’s securities subsidiary and nationally chartered bank “failed to tell customers it preferred JPMorgan-managed mutual funds and hedge funds from 2008 to 2013.” The firm will pay $267 million to the Securities and Exchange Commission and an additional $40 million to the Commodities Futures Trading Commission.
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