FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Online Portfolios Can Help Advisors Leverage Their Time (Investment News)
“Rather than fight the rise of machines, I embrace it,” writes Charles Sizemore. “By posting my portfolios online — and by posting regular commentary on my blog and via social media — I help establish both while building name recognition.”
Online portfolios can help advisors save a lot of time. Sometimes, taking on smaller clients ends up being “a money-losing proposition” because there is more paperwork and time involved than the eventual payout. Instead, advisors can direct these smaller clients to basic, pre-designed online portfolios.
By doing that, advisors can “leverage their time and focus on higher value-added aspects of building a practice” and also add on more higher-worth clients.
A Former Wells Fargo Compliance Officer Has Been Charged With Altering Documents (The Wall Street Journal)
The SEC charged a former Wells Fargo compliance officer, Judy Wolf, with altering her own review of an investment after it was suspected of insider trading.
“Ms. Wolf didn’t find anything wrong with the investment. But when the SEC charged the broker with insider trading in 2012, she went back and reworked the document to make it look like she had done a more extensive examination before submitting it to regulators who later flagged the changes,” reports Matthias Rieker.
“…her conduct was inconsistent with what the SEC expects of compliance professionals and what the law requires,” Daniel M. Hawke, the chief of the SEC Enforcement Division’s Market Abuse Unit said.
ETFs Are Easy To Use And Are Less Expensive Than Mutual Funds (BlackRock Blog)
ETFs are fairly similar to mutual funds, and use both stocks and bonds in their portfolios. “Both vehicles have their uses: actively managed mutual funds generally seek to outperform a market or index, while most ETFs aim to track an index as closely as possible. ETFs are required to disclose their holdings daily, meaning you always know what you are invested in,” writes Heather Pelant.
However, ETFs tend to have lower annual expenses than actively managed mutual funds and are more tax efficient.
Additionally, ETFs are “easy to use” because they can be bought and sold like stocks, writes Pelant. “But just because they’re easy to trade doesn’t mean you have to; they make sense for both long and short term investments,” she adds.
Long Term Care Policies Aren’t The Best Option For Most (Financial Planning)
For most clients, it no longer makes any financial sense to get a long term care policy. The average costs for long term care insurance increase greatly as retirees get older. At age 60, the average person pays $US1,936 per year and that number sharply increased to $US7,291 per year at age 75.
Despite the steep cost, these policies pay only $US150 per day for up to three years, and many clients can afford to pay these fees by themselves. In other words, it is not worth to pay for expensive Long Term Care policies with rising premiums and diminishing benefits.
Additionally, it does not make sense for clients that qualify for medicaid to pay for long term care policies.
Charles Schwab analysts will be paying attention to US companies that have major overseas exposure during this earnings season. The energy, materials, industrials and IT markets have the largest shares of foreign exposure. Since September 18, companies in these sectors have been the worst performers on the S&P 500.
The “slowdown in demand from Europe and China has been weighing on exporters”, and the decline in commodities prices is “acting as a drag on energy and materials producers,” writes Jeffrey Kleintrop.
“The economic slowdown overseas may weigh on earnings growth of US companies with significant foreign sales,” concludes Kleintrop.
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