Independent financial advisors who want to grow their firms have to be prepared to change the way they think and do business, writes consultant Angie Herbers. She highlights four areas where thinking must shift, including being a leader instead of a manager and putting more focus on personal well-being.
Rather than aim for unlimited growth, financial advisors should limit their firms to no more than 70 clients with whom they have deep, personal relationships, marketing consultant Sara Grillo recommends. This model requires less work, is more profitable and is likely to result in higher client satisfaction, she writes.
Spouses who are not US citizens may be subject to gift and estate taxes on marital assets, even though spouses who are US citizens are not. Sean Wilson of TIAA Wealth Management discusses how he advised a couple when one spouse was not a US citizen to set up an irrevocable life insurance trust and a qualified domestic trust to shield many of their assets from estate taxes.
Proxy advisory firms and institutions that rely on their recommendations might be forced to change methods in response to guidance from the Securities and Exchange Commission. The Council of Institutional Investors and others are concerned about a part of the guidance that classifies proxy voting advice as solicitation and about requirements that they say could be costly and time-consuming to comply with.
Life insurance is a valuable financial-planning tool that has benefits beyond estate planning, writes Salene Hitchcock-Gear of Prudential Financial. She discusses six ways to use life insurance, including creating additional retirement income, transferring business ownership and reducing estate tax.
Two lawsuits have been brought asking judges to strike down the Securities and Exchange Commission's Regulation Best Interest. A number of legal and industry experts offer their opinions on the merit of the suits, with Robert Lavigne, managing director at Bates Group, noting firms should continue to prepare for the implementation of Reg BI regardless of the court challenges.
Investors with spare cash have cashed in on recent disruptions to the overnight repo market caused by a short-term spike in lending rates. "Where you were seeing rates at 2% for the last several months, all of the sudden you were getting overnight repos at 5%," says one trader.
Data from the European Securities and Markets Authority shows that alternative investment funds have a combined exposure to collateralized loan obligations of €17 billion. ESMA says the holdings are concentrated in just 20 funds, which between them hold some 50% of all leveraged loan and CLO exposures among EU-domiciled funds.
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