FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
How to use March Madness as a marketing tool (Wealth Management)
With March Madness tipping off later this month, Wealth Management gives some tips on how to use the tournament as a marketing tool for both clients and perspective clients. First, create an office pool and invite any who can provide a boost to your business. Next, organise some viewing parties that give you the opportunity for facetime and to connect. As the tournament progresses, make sure to send out periodic personal updates and schedule more smaller gatherings to further develop relationships.
Intra-family loans can help you take advantage of low interest rates (Investment News)
The use of intra-family loans have gained popularity during this low interest rate environment. According to John J. Voltaggio, managing director and senior wealth adviser at Northern Trust Corp, “It’s better than having your child borrow from the bank.” While the loans can provide benefits to all parties, be sure they are structured properly, or they will draw the ire of the Internal Revenue Service. If the loans are not paid back, they will be treated as a gift for tax purposes.
The long end of the yield is curve likely to be volatile (Advisor Perspectives)
Mark Otterstrom and Susan Regan of Ivy Investment Management Company noted the front end of the yield curve, which is where you’ll find short-term interest rates, is likely to remain anchored even if the Fed hikes rates in June or July as many expect. The duo notes the long end of the yield curve is likely to see increased volatility in the event of a rate hike. So how should you position yourself for a fed rate hike? They suggest, “investment-grade corporate credit offers the best risk-adjusted spread cushion of the major sectors in the high-grade fixed income market. With economic conditions improving in the U.S., we expect to see relatively stable corporate bond spreads on investment-grade bonds.”
Here’s how to use your downtime more effectively (Financial Planning)
Ron Carson, founder of Carson Wealth Management, a firm with $US4.3 billion in assets under management, recently spent three weeks confined to a bed following surgery. How did he make use of his time? He spent his days picking up the phone and calling current and prospective clients, and managed to generate more than $US50 million in new advisory assets.
Diversifying a client out of company stock options (Wall Street Journal)
Executives at publically traded companies accumulate large amounts of stock options over the years. However, they often have a difficult time diversifying out of those options because of their loyalty to their firm. Lynn Chen-Zhang, a financial advisor, spoke to the Wall Street Journal about how she convinced her client, an executive at a medical devices company, to diversify ouy of his stock options. To drive home the point of the need for diversification she told her client to imagine a scenario where “the company’s stock price fell by 20%, the value of the client’s options would fall by 47%, to $US1.8 million,” and asked what type of impact that would have on his retirement. “With stocks you can just hold on to it until it goes back up,” noted Chen-Zhang. “But options expire so you have to address them.”
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