FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Checking account fees are going up (Bankrate)
A new Bankrate survey of 250 of the country’s banks and thrifts discovered the amount people are paying in checking account fees is on the rise. Bankrate says never before in the past 12 years has so few banks (37%) offered totally free checking. However, most banks (95%) are willing to give totally free checking if you maintain a minimum balance, usually $US500 or $US1,000, or make regular deposits. The study found the average withdrawl using an ATM outside your network costs $US4.52, and was responsible for $US283 million in banking revenue during the second quarter of 2015. Overdraft fees are up 1% versus a year ago, averaging $US33.07, according to Bankrate. All of this comes at a time when the average yield for a checking account is 0.05%.
The amount of money pulled from Pimco’s flagship Total Return Bond Fund increased to $US2.3 billion in September, up from $US1.8 billion in August. According to Reuters, the fund has seen more than $US11 billion of withdrawls since the start of 2015 as it deals with the fallout from the departure of co-founder Bill Gross. Additionally, the Pimco Income Fund has seen $US10.3 billion in outflows over the course of the year.
Nelson Peltz disclosed a big stake in GE (Reuters)
Activist investor Nelson Peltz announced a massive $US2.5 billion stake in General Electric. Peltz’s Trian Fund Management says it owns 98.5 million shares of the industrial giant, amounting to its largest position. “Trian believes GE has significant long-term potential and that its implied target value per share, including dividends, could be $US40 to $US45 by the end of 2017 based on our view that GE can deliver EPS of at least $US2.20 in 2018,” Trian CIO Ed Garden said in a statement. Trian has not asked for a board seat, but it does want GE to increase cost-cutting efforts and potentially sell more finance assets, Reuters says.
US retirement assets were little changed in the second quarter (Investment News)
The amount of money held in US retirement accounts slipped in the second quarter. Total retirement assets fell to $US24.8 trillion, down from the first quarter reading of $US24.9 trillion. Investment News says the amount of assets held in defined contribution plans gained 0.4% in the April to June period, and now stands at $US6.8 trillion. Meanwhile, IRA assets also increased by 0.4%, and are now at $US7.6 trillion.
3 steps to help solve the retirement crisis (Think Advisor)
At Morningstar’s ETF Conference Charles Ellis, founder of financial consulting firm Greenwich Associates and co-author of the book “Falling Short: the Coming Retirement Crisis and What to Do About It,” warned millions of Americans don’t have enough money saved for retirement. Think Advisor says, Ellis believes a combined effort from employees, employers and the US government can help rectify the problem. Workers need to retire later, employers should automatically enroll clients in their 401(k) plan and the government needs to reform Social Security, Ellis says.
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