FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Regulators are watching advisor relationships with the elderly (Financial Planning)
Rick Fleming, head of the US Securities and Exchange Commission’s Office of the Investor Advocate, notes, “About 10,000 baby boomers will celebrate their 65th birthday every day from now until 2030.” The ageing US population has caused regulators to increase their oversight of financial abuse against the elderly, provoking advisors to pay close attention to ‘red flags’ that might draw the ire of regulators. Specifically, advisors should make sure they don’t exceed a clients risk tolerance, or make trades in a client’s account just for the sake of generating commissions. Advisors also want to avoid complex products that are difficult to understand, and make sure they warn clients about any fees associated with a product.
Fed Vice Chair Stanley Fischer spoke to students at Tel Aviv University in Israel on Tuesday and told them, “The tightening of U.S. policy will begin only when the U.S. expansion has advanced far enough — when we have seen further improvement in the labour market and when we are reasonably confident that the inflation rate will rise to our 2 per cent goal.” Fischer warned, “We should also expect spillovers when monetary policy is tightened.”
Another small broker dealer is closing up shop (Wealth Management)
Manna Capital Management CEO David Kassir has closed its doors after running the firm for the past six years. Kassir noted, “There’s no way on Earth one or two people can run a broker/dealer and sustain in this environment and be profitable.” He continued, “Unless the regulations change, it’s a broken model and that we will continue to see … compression in the industry.” Among their problems, smaller broker dealers are having difficulty finding someone to clear their transactions, in addition to keeping up with compliance. Wealth Management says, over the past year, 212 broker dealers have closed their doors while just 147 have opened.
Same-sex couples need help planning their finances and estates (Financial Advisor)
Next month, the US Supreme Court will rule on the legality of same-sex marriages. So what should same-sex couples do to take control of their finances in the meantime? Matthew T. McClintock of WealthCounsel believes couples should not wait for a ruling from the Supreme Court, and should put their plan in writing ahead of the decision. Revocable trusts are one option, because of their ability to avoid the probate process. Cash, investments and real estate should be listed under joint ownership in the event of a sudden passing, according to Katie C. Williams of Diversified Trust Company.
Baird beefs up its staff (Think Advisor)
Baird announced Eric Pronovost has joined its Portland, Maine office from UBS. Pronovost will serve a dual role as both branch manager and advisor. The company also announced the hiring of Robert Gorman, who will join the Columbus, Ohio office as a director and advisor. Gorman was at Morgan Stanley for the past 25 years.
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