FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
A teacher fell victim to a ponzi scheme on Craigslist (Think Advisor)
Premiere Asset Management of Talladega, Alabama was issued a cease and desist order and charged with fraud for allegedly operating a ponzi scheme. Premiere allegedly lured an unsuspecting retired school teacher into investing almost $US200,000 by posting an ad on Craigslist, promising a 100% return in less than 48 hours. The teacher made two wire transfers to the firm before Premiere’s bank accounts were closed. According to Think Advisor, “The complaint seeks full restitution to investors and a permanent bar against the respondents from all securities business in Massachusetts, along with a permanent cease-and-desist order and an administrative fine.”
With the Federal Reserve expected to raise interest rates sometime in 2015, BlackRock’s Russ Koesterich examined some off the radar places to ride out the shift in interest rates. He believes the financial and healthcare sectors are worth considering. Koesterich says, “Banks are a potential beneficiary of higher rates,” and unlike other safe-havens utilities and telecommunications, healthcare “has generally performed relatively well in a rising-rate environment.”
The direct investment industry paid out $US5.9 billion in 2014 (Wealth Management)
Research from Investment Program Association and DST Systems found the direct investment industry, including non-listed real estate investment trusts (REITs) and business development companies, paid out $US5.9 billion to investors in 2014, equating to approximately 7% of its $US84.5 billion in assets. Kevin Hogan, CEO and president of the IPA told Wealth Management, “At the end of the day, that’s exactly what these products are designed to do.” He continued, “That’s real money for you and me and people that are retiring and need that money to live off of, especially in an environment that we’re in today, where the yields are so low.”
A House subcommittee is trying to freeze the SEC’s budget (Investment News)
The House Appropriations Committee has introduced a bill that would freeze the US Securities and Exchange Commission’s 2016 budget at $US1.5 billion. If passed, the bill would appropriate $US222 million less than the amount requested by the Obama administration. According to Investment News, “The funding level for the SEC is significantly less than SEC Chairwoman Mary Jo White has told Congress the agency needs to increase investment adviser exams from the current annual level of about 10% of the approximately 11,500 registered advisers.”
3 trends in IRAs (Financial Planning)
The investment landscape is always changing. Financial Planning examined three transformative trends taking place in Individual Retirement Account. First, tax reform may eventually erode the tax benefits of the IRA. Financial Planning says to pay attention to the resolution of the Department of Labour’s proposed fiduciary rule as it may alter the Employee Retirement Security Act of 1974. Also, demographics are an influencing force. Financial Planning reports, “Two-thirds of millennials expect their primary source of income in retirement to be self-funded through retirement accounts or other savings and investments.” This will impact the makeup of the IRA industry in the years ahead. Finally, Financial Planning says there is a push toward making IRAs more widely accessible for those who don’t have employee-sponsored retirement plans.
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