FINANCIAL ADVISOR INSIGHTS: A Pennsylvania Man Allegedly Used A Ponzi Scheme To Swindle Money From His Mother

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A Pennsylvania Financial Adviser Swindled His Own Family Using A Ponzi Scheme (The Times Tribune)

A Pennsylvania financial adviser, Jason Muskey, reportedly used a Ponzi scheme to swindle his mother, his wife’s aunt and uncle, and two other unnamed people out of $US400,000. He was sued for his actions on Friday and is currently waiting to see whether or not he will have to face federal criminal charges.

“Mr. Muskey used the money for his personal benefit and covered up the thefts for years by sending out phony quarterly financial statements that outlined phony investments to the clients, all ‘ordinary, hard-working, blue collar citizens,’ who had saved money for retirement, the suit says,” reports Borys Krawczeniuk.

There’s No Such Thing As A Traditional Retirement Anymore (Financial Advisor Magazine)

Advisers will need to adapt to a new retirement landscape because there is no such thing as a traditional retirement anymore. There’s a lot more diversity in financial situations, which can be attributed to demographic changes.

“Advisors need to be ready to deal with three-generation families and retirees who have to work longer to take care of ageing parents,” and they “will also have to help clients who want the traditional retirement age of 65 or 66, but who have not saved for the longer retirement that longevity probably will provide,” reports Karen Demasters.

Investors Must Crack Fund Managers’ Narratives (Investment News)

A fund manager’s job is to tell a narrative about the numbers, and the adviser must “crack that narrative.” However, very few advisers attempt to do so, which could lead to negative consequences.

“The descriptions of process as crafted by the manager — and the illustrations used to visualise it — often find their way into due-diligence reports and the like without being seriously vetted in any way. … Cutting and pasting content is easy — but in the process you cut and paste your tacit approval of the manager’s story,” writes Tom Brakke.

The best evaluations, writes Brakke, are those that expose shortcomings, instead of just retelling the exact story from the fund managers.

China’s New Trading Link Is A Bright Light (Charles Schwab)

China is opening the “Stock Connect,” a link between the Shanghai and Hong Kong stock exchanges, which could lead to opportunities for investors.

“The opening of Chinese stock markets supports our positive view on China. We believe the Chinese government is pursuing reforms that could temporarily slow the economy but will create more sustainable and higher-quality growth over time,” writes Michelle Gibley.

Right now investors are nervous about China, especially as economic growth is slowing. However, “we believe policymakers can successfully transition away from debt-led investment toward a market-based economy,” which will in turn attract investors, writes Gibley.

Troubled Brokers Prey On The Elderly (The Wall Street Journal)

The Wall Street Journal investigated the records of 550,000 stockbrokers and found that there are 16 US hot spots where troubled brokers are more likely to be found. The biggest areas included New York’s Long Island, South Florida, areas around Detroit, Las Vegas, and California.

One of the highest rates of troubled brokers was in Delray Beach, in Palm Beach Country, which is a “retirement haven.” In fact, troubled brokers tend to cluster around communities that have large elderly populations.

“The rate of households headed by people 65 and older with incomes over $US100,000 was about 50% higher in the combined hot spots than the national average. Households with incomes in excess of $US100,00 in hot spots were about 22% more likely to be headed by people 65 and older than households nationally,” report Jean Eaglesham and Rob Barry.

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