FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Hillary Clinton and wealth managers have trouble relating to their target audience (Wealth Management)
Hillary Clinton and wealth managers share the same problem. Both have trouble relating to their target audiences. According to Wealth Management, “For Hillary, the issue is how to connect with regular folk when she and her husband have been living a 1% lifestyle. For wealth advisors, it’s the opposite question: How are they going to relate to the ultra affluent when they are not ultra affluent themselves?” So what can be done to remedy the problem? Make sure you know your audience and are well informed about what is going on.
A look at valuations (Charles Schwab)
Everyone has their own favourite valuation metrics, and that’s why there are differing opinions about whether or not stocks are fairly valued. Robert Shiller’s Cyclically-Adjusted P/E (CAPE) is better used for examining earnings over time because it looks at data from the past 10 years. Meanwhile, Forward P/E and Trailing P/E use much shorter time horizons. So what are the metrics saying now? Shiller’s CAPE says the stock market is about 70% overvalued while Forward P/E and Trailing P/E point to valuations that are stretched, but not extreme.
The Supreme Court just gave a big win to Americans planning to retire (Business Insider)
A US Supreme Court ruling has made it easier for employees to fight back against high 401(k) fees. In a 9-0 vote, the Supreme Court ruled that Edison, a Rosemead, California public utility company, had a “continuing duty to monitor” the makeup of its 401(k) plan after employees sued to gain access to funds with lower management fees. Michael Graham, a partner in the employee benefits group at McDermott Will and Emery in Chicago, told Main Street, the high court did not give guidance on how often investments should be monitored or by whom, this means companies will need to develop processes. The case has been sent back to California’s lower courts.
Mistakes to avoid when rolling over your IRA (Financial Planning)
Taxpayers often think they are in the clear because they consulted a team of professionals to help with their 401(k) rollovers, but that is not always the case. They should make sure they meet three key criteria before making the change. Rollovers should only occur once-per-year, must be the same property that was distributed and must be completed within a 60-day window. Financial Planning notes, “To avoid costly blunders like this, advisors need to understand these specific IRA rules.”
Sarah Megan Thomas and Alysia Reiner’s Equity, a movie about a female banker’s troubled IPO deal on Wall Street, begins filming next month. Bloomberg notes the film is “the product of interviews and meetings with dozens of former and current dealmakers, including James B. Lee Jr., a vice chairman of JPMorgan Chase, Barbara Byrne, a vice chairman of Barclays, muni bond maestro Alexandra Lebenthal, and Elaine La Roche, a former Morgan Stanley managing director who reigned as one of the most powerful women in finance in the 1990s.” The producers are still in talks for casting, and declined to reveal who was on the short list for the lead role.
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