FA Insights is a daily newsletter from Business Insider that delivers the tops news and commentary for financial advisors.
Companies can’t offer lump-sum buyouts to retirees (Think Advisor)
The Treasury Department and IRS have moved to stop companies from making lump sum buyouts of retiree pension plans. Norman Stein, a senior policy advisor to the Pension Rights Center and a law professor at Drexel University, told Think Advisor the Center is “gratified that Treasury has moved to stop these lump-sum buyouts, which are truly among the most cynical and dangerous pension abuses we’ve seen.” According to Stein, the buyouts force retirees into making investment decisions at the same time as they are withdrawing money from the plan, leading to confusion.
Funds are holding a lot of cash (Bloomberg)
The latest Bank of America Merrill Lynch Fund Manager Survey showed money managers are holding 5.5% of assets in cash, the most since the collapse of Lehman Brothers. Strategist Michael Hartnett notes a contrarian buy signal occurs when the percentage of cash money mangers hold rises above 4.5%. On the contrary, a contrarian sell signal would be set off if cash holdings dipped below 3.5% of assets.
Betterment launches auto-invest tool (Financial Advisor)
Robo-advisor Betterment has introduced an automatic investment tool. Financial Advisor says the new tool allows customers to set a maximum dollar amount on their bank account with anything over that amount being automatically transferred to Betterment. “We aim to automate the investing process here at Betterment and with SmartDeposit we enable customers to reach their financial goals without worrying or thinking about their finances,” Dan Egan, Betterment’s director of behavioural finance and investing, told Financial Advisor.
LPL agrees to $US250,000 fine (Investment News)
LPL Financial has agreed to pay a $US250,000 fine for to Massachusetts securities regulators for misrepresenting the qualifications of some of its advisors. Investment News reports “at least 10 brokers may have been using titles that did not comply with the state’s senior designation regulations.” The fine is the latest in a series against the firm dating back to 2012.
Where the money in advised assets is moving to and from (Wealth Management)
This has been a busy year for advisors switching firms. Raymond James has been the big winner so far in 2015, seeing a net increase of $US7.4 billion in assets through June, easily outpacing number two on the list, Merrill Lynch (+$US1.5 billion). Wells Fargo has seen the biggest outflow, with a drawdown of $US5.6 billion AUM.
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