FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
How debt will impact millennials (Yellow Brick)
Yellow Brick says two-thirds of Americans aged 23 to 35 have at least one form of long-term debt. While student loans are the biggest burden, with 37% of Americans carrying an average of $40,000 worth of loans, others are saddled with credit card, auto and mortgage debt. According to Yellow Brick, 67% of millennials didn’t receive adequate advice before taking out their loans and 40% of millennials will be delinquent on their payments within five years. Of millennials who make at least $75,000 per year, 34% of them doubt they will be able to repay their loans, Yellow Brick says. Student loans lead to more debt, and those who have trouble repaying are twice as likely to experience anxiety and depression. In addition, those with high debt levels are more likely to suffer from ulcers and migraines and twice as likely to have a heart attack.
Christine Lagarde said interest-rate hikes by the Federal Reserve risked hurting emerging markets if they were too aggressive. “The key issue going forward will be the pace of normalization,” Lagarde told a banking conference in Paris. “We agree that it should be gradual as announced, as stressed actually by the Fed, and based on clear evidence of firmer wage or price pressures.” According to Reuters, the International Monetary Fund head also warned on the potential for volatility in the foreign-exchange market.
Reuters reports, Deutsche Bank sent a memo to staffers highlighting its goal of becoming a top-5 wealth management firm. According to Reuters, the memo says the firm is looking to reduce risks “in a challenging regulatory and control environment” while catering to client needs. Research firm Scorpio Partnership says the investment bank has fallen to 12th in the rankings after holding the 8th spot from 2012 to 2014.
TD Ameritrade Institutional’s 2016 RIA Sentiment Survey found RIAs still have a positive view of the US economy, but are preparing their clients for a possible sell off in the stock market. The survey found RIAs are most worried about Fed rate hikes, but are also concerned about muted corporate earnings, US job growth and employment, a slowing Chinese economy and the strong US dollar. TD found 79% of RIAs have begun preparing clients for a stock market slide. Strategies include moving money into less volatile securities, moving out of interest rate sensitive securities and rotating into cash.
BlackRock named some promotions (Bloomberg)
BlackRock has named Rich Kushel head of multi-asset strategies and Tim Webb in charge of global fixed income, Bloomberg says. Kushel previously served as BlackRock’s chief product officer and head of strategic product management and Webb was the head of international (ex-US) fixed income. Both will report to BlackRock’s President, Robert Kapito. Rick Rieder, CIO of fundamental fixed income, has been named CIO of global fixed income.
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