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The Wealthy Can Benefit Financially From Giving To Charity (Investment News)
Investors who give money to charity end up winning big: Hefty donations result in major income-tax deductions.
Charitable donations are a particularly good idea following the American Taxpayer Relief Act of 2012. Last year, many ultra-wealthy clients “wrote some sizable checks to the federal government.” Donating is an especially valuable strategy to avoid this, writes Darla Mercado.
This is relevant lately considering the incredible five-year bull market in stocks. Indeed, charitable donations are expected to go way up in 2014.
“Fidelity Charitable made $US1.6 billion in total donor-recommended grants for the first nine months of this year, up 27% from the year-ago period,” reports Mercado. Additionally, donors are planning on giving away more assets this year — some will even give away interests in small businesses.
However, Clients Also Face A Big Danger With Charitable Donations (Financial Planning)
There are many benefits to charitable donations, including, for example, tax deductions. However, the biggest danger with charitable donations is that clients give up control of their money.
It’s important to make sure that clients will not be depending on the income stream generated by those assets, because once control is given up, the assets are no longer considered reliable, according to Steven Merkel, an adviser with Ciccarelli Advisory Services.
“Don’t allow the investment benefits or tax privileges or preferences to be the only reason you are going to go down this path,” said Tim Maurer, the director of personal finance for Charleston-based BAM Alliance.
As of right now, SEC Chairwoman Mary Jo White has not publicly shared her opinion on the potential uniform fiduciary rule. There’s been an ongoing debate over whether it will be instituted.
However, on Monday, White said “that she would provide more ‘clarity’ as to her position regarding a uniform fiduciary rule in the ‘short term,’ despite the fact that the agency has not yet decided ‘whether to do something or what to do’ regarding such a rule making,” reports Melanie Waddell.
The hardest thing about the fiduciary rule, according to White, is the how-to question. “Care needs to be taken to ensure we’re not harming investors by driving away service providers in the brokerage space,” said White.
There Is Still Hope For Japan (Advisor Perspectives)
Many people believe that they missed a rally during Japan’s strong performance under Abenomics. However, there’s still room for further appreciation in Japan, argues Christopher Gannatti.
There are reasons why that’s the case. First, the TOPIX is still more than 30% below precrisis levels. Second, “expectations of earnings for Japanese firms have been very strong during Abenomics.” And third, profits have achieved record highs under Abenomics. During the first quarter of 2014, “Japanese profits had achieved record levels of over 17 trillion yen,” writes Gannatti.
The RBC Wealth-Management Division Just Swiped A Merrill Lynch Wealth-Management Team (The Wall Street Journal)
The RBC Wealth Management division just got a Merrill Lynch Management team led by Daniel Thompson. “Thompson and his team managed $US103 million in assets under administration and $US1.2 million in production,” reports Michael Wursthorn.
RBC Wealth has added many advisers over the fiscal year. The firm “has attracted 83 new advisers who managed more than $US8 billion in assets and have more than $US59 million in production” and now manages over $US278 billion in assets, reports Wursthorn.
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