FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
HBO’s ‘Ballers’ highlights the financial advice industry (Investment News)
In HBO’s ‘Ballers,’ Dwayne ‘The Rock’ Johnson plays a retired football player turned financial advisor. Investment News says while there are some embellishments, Johnson learns early on in his new career that planning and relationship building is a key aspect of the job. He is constantly networking and meeting with perspective clients, trying to them to sign the dotted line. “It is really managing clients’ behaviour and making sure that we deliver the message in a way that is going to resonate with them,” Melissa Sotudeh, a financial advisor with Halpern Financial, told Investment News.
Bill Gross made another correct call, but missed out on the trade (Business Insider)
Bill Gross predicted China’s Shenzhen Composite Index was the next big short. He was right. However, just like with call that German Bunds were the ‘short of a lifetime,’ he failed to capitalise on his call. Gross told Bloomberg’s Mary Childs, “I was trying to stick to my knitting, and China wasn’t really my knitting.”
F-Squared files for bankruptcy (Financial Advisor)
F-Squared has filed for Chapter 11 bankruptcy and has also agreed to sell its to Broadmedow Capital. The company gained popularity among investment advisors between 2001 and 2008, by marketing a successful algorithm-based strategy which in reality didn’t exist. Financial Advisor reports, “the SEC said it wasn’t until September 2008 that F-Squared started to receive the algorithm-based buy and sell signals from a third-party data provider that became the AlphaSector Premium Index.” Terms of the sale were not disclosed as they are pending court and client approval.
Democrats are proposing free community college (Think Advisor)
Two Democratic members of Congress have introduced a bill that would make community college free. According to Think Advisor, the bill introduced by Senator Tammy Baldwin, D-Wis. and Representative Bobby Scott, D-Va. “proposes $US3 worth of federal aid for every $US1 invested by a state in order to waive community college tuition and fees for eligible students before other financial aid is applied,” and would cover “a significant portion of tuition and fees” for either the first or last years of college for low-income students attending four-year minority institutions such as historically black colleges and universities and Hispanic-serving institutions.” The bill is estimated to cost $US90 billion over 10 years.
The mutual fund industry doesn’t like being labelled systemically important (Financial Advisor)
Add the mutual fund industry to the list of those who don’t want to be named systemically important by the international Financial Stability Board (FSB) and the U.S. Financial Stability Oversight Council (FSOC). Paul Stevens, president and CEO of the Investment Company Institute, told the Senate Banking Committee naming mutual funds systemically important financial institutions could hurt Americans who are saving for retirement. However, he did not provide any specifics. Stevens also suggested if a fund is named systemically important, there is no way to challenge the ruling.
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