FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
“Twenty per cent of registered investment advisers participating in InvestmentNews’ annual benchmarking study of financial advisory firms managed $US1 billion or more in assets last year. That number was 2.5% a decade ago.” Advisers with more than $US1 billion in assets outperformed their peers since the financial crisis. They have seen their revenues jump by more than 23% annually with their average client investing $US2.74 million. This compares to advisors with less than $US1 billion in assets who have seen revenue growth of just 15% and an average investment of close to one-third the size. Having a $US1 billion in assets under management has other benefits, including reduced rates on technology and more competitive pricing from vendors. “If you’re at a billion, the goal should be how to get to $US5 billion in assets and $US25 million in revenue,” added Joe Duran, chief executive of United Capital, based in Newport Beach, California.
A financial adviser is suing a celebrity client he defrauded (Richmond Biz Sense)
Getty Andrew Rothenberg is suing Dave Matthews Band member Boyd Tinsley, a client he defrauded, for $US10 million. Mr. Rothenberg claims Tinsley sabotaged his business, causing him to lose out on several high profile clients, and the potential of earning millions of dollars. Rothenberg pleaded guilty to one count of felony wire fraud and was forced to pay $US1.25 million in restitution after stealing millions of dollars from Tinsley while serving as his advisor. Rothenberg served nine months in prison and remains under house arrest, but has filed suit against Tinsley, saying, “I want to be financially compensated for the business he cost me.”
5 tax deductions for the self-employed (Think Advisor)
The April 15 tax deadline is rapidly approaching. With that in mind Think Advisor decided to share five tax deductions every self-employed worker should make sure they include when filing. Home office expenses, health insurance premiums, self-employment tax, retirement tax shelters, and depreciation of equipment deductions are vital for reducing the tax bill of those who are self-employed.
Men save more than women for retirement (Financial Advisor)
BlackRock’s annual Global Investor Pulse Survey found only 53% of women are saving for retirement, well below the 65% of men. The late start by women means the average woman aged 55-64 has $US81,300 in retirement savings while a man of that age has put away $US118,400, on average. Financial Advisor notes, “This gap is particularly troubling given that women live longer than men — at birth, the life expectancy for U.S. women is about 79 compared to 72 for men, according to the report.”
When to invest in high-yield bond funds (Financial Planning)
High yield bond funds have seen a tremendous amount of interest as a result of the Fed’s low interest rate environment. The group is yielding almost 400 basis points above Treasuries while seeing a historically low default rate of 1%. While that rate is still expected to climb to 1.5% to 2% by the end of the year, it would still be well below the historical norm. Mark Hudoff, portfolio manager of Hotchkis & Wiley High Yield in Corona del Mar, California noted while he still likes the space, “High-yield bonds aren’t 100% immune from interest-rate risk,” and expects weakness as the Fed begins to move off the zero bound.
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