InvestmentNews reporters offer their take on intriguing or controversial articles from around the web.
Jun 27, 2014
As Finra looks to boost awareness of its database of brokers' records, more advisers may find themselves revisiting some of their lives' more dubious moments. In addition to a broker's employment history and any customer complaints, the Financial Industry Regulatory Authority Inc.'s database is full of youthful indiscretions from the classic fraternity prank gone awry to shoplifting and drag racing. Even though they may not be investment-related, they must still be disclosed.While those indiscretions may go under the radar now, several Finra efforts, including a proposal to require brokers to include a link to the database on all online marketing materials and social media, may bring some skeletons out of the closet. There's the case of the broker who stole a cheeseburger to get into his fraternity, another who got on a train without paying and several who wound up in handcuffs trying to impress their girlfriends. (Here are 12... Read full post
Jun 23, 2014
If I return to this world in a future life, I will make sure to come back as a regulator with the Financial Industry Regulatory Authority Inc. That's kind of sad, because when I was a kid all I wanted was to grow up and play second base for the New York Mets. But the pay and benefits at Finra, the securities industry's self-regulatory organization, are so lofty that it makes the dreams of youth well worth deferring. Indeed, the average Finra employee does far better in terms of compensation and benefits than someone who works in the securities industry, which I cover for InvestmentNews. According to Finra's 2013 annual report, which was issued last Friday, the average compensation and salary for the 3,400 Finra employees last year was $197,000, excluding certain severance and pension costs. That's pretty sweet, particularly as it practically doubles the mean wage earned at all 167 occupation titles listed in the 2013 “Securities... Read full post
12:01 am EST
It's been more than five years since Bank of America Corp. acquired Merrill Lynch & Co. Inc., but some of the firm's “thundering herd” of brokers still jump at the threat of any changes to the Merrill Lynch name. A new tweak to Merrill Lynch advisers' business cards earlier this year was all it took to cause a stir among some brand loyalists among the firm's approximately 13,700 advisers.Several current and former Merrill Lynch brokers and industry recruiters pointed to two key changes: the shrinking of the iconic Merrill Lynch bull on the front of the cards and the addition of a red and blue strip at the bottom symbolizing Bank of America's two-tone flag. “Not only are the colors of the bank's flag at the bottom (front) of the card, but the Merrill Lynch bull is getting smaller,” said one veteran Merrill Lynch adviser, who is based in New England and had been with the firm since before the Bank of America... Read full post
Jun 6, 2014
All the technological advances being reported at Pershing's INSITE conference this week are exciting. Interconnectivity, rapid communication, intuitive computers that talk to each other, mobile devices everywhere and other digital wonders — it's hard not to be impressed.But as I roamed around the conference's session rooms and exhibition spaces, I couldn't deny my sneaking suspicion that all this technological change is happening so fast that my brain just can't keep up.As it turns out, there's science to back up my suspicion.In one of the final INSITE presentations on Friday, neuroscientist Baroness Susan Greenfield (yes, that's right, she's a British baroness and a member of the House of Lords), told a room packed full of financial advisers that living online is changing our brains — and it's not all for the better.The fact is, technology is changing the world so quickly that it can be difficult to slow down enough to... Read full post
May 30, 2014
The Financial Industry Regulatory Authority Inc. expelled John Thomas Financial on Halloween last year, but the ghost of the broker-dealer lives on — at least on Twitter. The defunct firm, which Finra accused of fraud last year, operates under the handle @JohnThomasBD, tweeting once a day, to about 150 followers. The tweets tag financial media outlets and advertise a daily newsletter that the firm puts out with fresh content from around the web. On Thursday, the newsletter featured stories from other news outlets on Maya Angelou, Edward Snowden and Apple Inc.'s purchase of Beats Electronics. The heading still maintains the firm is a full-service broker-dealer member of Finra, the Securities Investor Protection Corp. and Nasdaq. “John Thomas Financial is a full-service brokerage company started with the aim of assisting investors encounter the increasingly difficult choices,” the newsletter's heading reads. The... Read full post
May 14, 2014
Financial professionals are trying to push behavioral finance beyond a set of theories about why investors make the wrong financial decisions toward helping clients overcome their money-losing tendencies. One example of a recent spotlight on the issue: the National Association of Personal Financial Advisors' spring conference is focused on "shaping behavior." NAPFA has brought leading speakers in the behavioral finance field (and this reporter after multiple airport reroutes) to Salt Lake City, Utah. The conference opened today with financial writer Nick Murray imploring advisers to become behavioral investment counselors. "It's the only hope that America has [to help the] biggest generation of Americans who have ever lived from not outliving their money," Mr. Murray said. I covered a session featuring Mr. Murray yesterday at the Loring Ward adviser conference in Washington, and have seen behavioral finance topics crop up more often... Read full post
Apr 25, 2014
Firms offering unpaid internships this summer may be standing in murky waters. Several unpaid interns have sued large companies such as 21st Century Fox and Viacom Inc. in cases that are winding their way through federal courts. Also, some cities like New York and states including California and Oregon have moved in the past year to boost protections for all interns. “We encourage advisers to avoid potential problems and pay people, and it's not just a legal thing,” said Jon Yankee, principal at Fox Joss & Yankee. “If they are good-quality people, they deserve to be paid and to be given a good experience.” Mr. Yankee, whose firm published a white paper on adviser internships in 2011, said he thinks most advisory firms are paying their interns. He said more college students are expecting to get paid, in part because schools are teaching them that their time is valuable. “We have always paid interns for... Read full post
Apr 24, 2014
Gender bias is alive and well in the financial advisory industry, and though eliminating it will be a monumental effort, everyone can play a role to ensure that aspiring women advisers thrive. The Certified Financial Planner Board of Standards' Women's Initiative held a seminar in New York City on Tuesday morning at which new research was discussed that brings to light the hurdles that continue to plague female financial advisers. Though 72% of women with the CFP certification are satisfied with their careers, based on a survey of 262 female CFPs by Fondulas Strategic Research, the qualitative research shows that women face biases and discrimination at the workplace. The FSR survey shows that only 29% of the 975 women surveyed (including female financial professionals and those aligned with college programs in this space) agree that “the office culture in financial firms makes women financial planners feel welcome and respected.... Read full post
12:01 am EST
I spent a good part of 2013 and early 2014 warning financial advisers about higher taxes that were just around the corner for their clients due to the American Taxpayer Relief Act of 2012. But I never anticipated I'd be writing Uncle Sam a four-figure check. Ouch. The exact amount on my husband and I owed for federal taxes was $4,175. That's decent-vacation-in-Europe money. Or new-pair-of-fancy-roadbikes money. The best alternative? We could've just left that money where it was originally: sitting in our emergency fund savings account. For those of you who missed all the stories I wrote last year and through the first few months of 2014, here's a quick recap on ATRA: Single filers with taxable income over $400,000 and married-filing-jointly filers with taxable income over $450,000 will be subject to a top marginal income tax rate of 39.6%, plus a top marginal tax rate of 20% on long-term capital gains. Starting at the $250,000... Read full post
Apr 7, 2014
I have been to the future and back, and I can report that it is cool, wearable and full of Wi-Fi-enabled screens of all sizes.On Friday, I traveled to Fidelity Institutional's Office of the Future, in Smithfield, R.I., which will officially open to advisers this spring, and got a sneak peek of how the latest technology can facilitate the adviser-client relationship. I also ventured into the firm's Boston headquarters for a tour of Fidelity Labs.Here's what I learned: Computer hardware is disappearing from view as data moves into the cloud. Software now functions increasingly as a web-based service. Business can be conducted anywhere, anytime, as long as people have access to personal computers, laptops, tablets, smartphones — and even smartwatches and other wearable technology.When I say that the future is cool, I'm comparing it with the 1960s, when Fidelity and other companies designed their first mainframe computers —... Read full post
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