FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Wealthy Baby Boomers Are Terrified Of Health-Care Costs (Financial Advisor Magazine)
62% of wealthy Baby Boomers “are terrified of out-of-control health care costs and 72% say health care costs are their top concern for their retirement years,” according to a Nationwide Retirement Institute survey. “Wealthy” was defined as those whose household incomes of at least $US150,000.
The survey shows that “even America’s affluent workers don’t know how they will fund their health care costs in retirement and they don’t expect Obamacare with help them,” John Carter, the president of Nationwide’s retirement plan business, said.
26% believe that the “solution” to health care costs is working in retirement. However, according to Carter, only 3% actually manage to do so.
Research has shown that rebalancing portfolios is one way to reduce risk, and investors should consider rebalancing at the end of the year, according to Christine Benz.
“But assuming that you are going to be doing some rebalancing within your taxable portfolio, you can also perhaps be a little bit preemptive in terms of managing your tax hit,” Benz adds. “If you’re going to be selling something and realising capital gains on which you’ll owe taxes, you may be able to find some losing holdings in your portfolio that you can sell, realise the tax loss, and use that tax loss to offset your capital gains burden.”
Fidelity Is Fully Embracing Robo Offerings (Investment News)
Fidelity just made a deal with another robo-adviser, LearnVest, reports Liz Skinner. This comes two months after the firm made its first deal with a robo-adviser, Betterment Institutional. And in the future, the firm is considering launching its own automated advice platform.
Fidelity’s relatively new focus on robo-advisers reflects the larger shift happening in the advisory industry overall.
“We have a front row seat on what the market is looking for and we’re monitoring it very quickly to see what we could do on a proprietary basis. The market should not be surprised if we serve up these capabilities more natively through time,” said Michael Durbin, the president of Fidelity Institutional Wealth Services.
Equities Are Going To Drive Convertible Bonds In 2015 (Advisor Perspectives)
Convertible bonds allow investors to switch their bonds into equity — so a strong equity market is great news for convertible bond investors. Since credit and sovereign yields have dropped to historic lows, “the potential for investors to retain bond-like qualities while potentially benefiting from supportive equity markets can make convertibles a compelling opportunity,” according to Martin Kuehle.
However, it’s important to remember that convertible bonds vary greatly by region.
“The US convertible bond market is by far the biggest, most efficient and over the long-run, the most fairly price. At the other end of the spectrum, Asia is the smallest, least-liquid and on average comes with the highest credit exposure,” write Kuehle. “Being aware of these differences is integral to generation outperformance.”
Northwestern Mutual Sold Russell Investments For $US2.7 Billion (Financial Planning)
Northwestern Mutual sold Russell Investments for $US2.7 billion to the London Stock Exchange, reports Suleman Din. Northwestern originally acquired the asset manager back in 1999.
“Meanwhile, Russell has scaled back its exchange traded product offerings. It decided in late November that the Russell Equity ETF, its last existing ETF offering, did not generate the projected level of interest it wanted. Russell will halt any investment into the fund in January and close it by Feb. 6, 2015,” reports Din.
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