FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
How to prepare clients for the loss of a spouse (Financial Planning)
Financial Planning spoke with Benjamin Birken, a CFP with Woodward Financial Advisors, about how to prepare financially for the death of a loved one. Birken suggests preparing in advance because, he says, “Giving people a big checklist of tasks a week after their spouse dies is a nonstarter.” He believes it is important to take note of everything from asset titles to life insurance policy contacts to whose name is on each bill.
Morgan Stanley’s Gorman defends his pay raise (Think Advisor)
Morgan Stanley CEO James Gorman received a 25% pay increase in 2014. Gorman says his pay raise to $US22.5 million reflects “three years where the stock went up.” According to the Associated Press, Gorman’s pay raise still does not put him in the top 10 highest paid CEOs.
The sale of pre-IPO shares could spell trouble for retail investors (Financial Advisor)
The Securities and Exchange Commission’s enforcement unit warns of a knowledge gap between the people buying and selling pre-IPO shares. “It’s a guarantee investors are not going to get complete information,” said Reid Muoio, the agency’s deputy chief of the complex financial instruments unit.
Inflation expectations have rolled over (Gavekal Capital)
Inflation expectations in the US have rolled back over in May after four months of gains. After putting in a trough of 105 basis points on January 13, 2015, 5-year TIPs derived breakeven inflation climbed to a peak of 172 basis points on May 5. The reading has since slumped back down to 154 basis points. Gavekal Capital notes, “One of the Fed’s preferred inflation measures, the 5-Year, 5-Year Forward Breakeven Inflation Rate, remains at the low end of its range over the past 12 years. It currently sits at just 2.06%.”
The US economy shrank in the first quarter (Business Insider)
According to the second estimate of first quarter GDP, the US economy contracted at a 0.7% annualized rate. The data showed a sharp downward revision from the initial print of up 0.2%, but was better than the 0.9% drop that economists were anticipating. According to the Bureau of Economic Analysis, “The decrease in real GDP in the first quarter primarily reflected negative contributions from exports, nonresidential fixed investment, and state and local government spending that were partly offset by positive contributions from personal consumption expenditures (PCE), private inventory investment, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.”
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