Results for "Outside-IN"

Jan 23, 2019, 4:32 PM EST

Jack Bogle: Capitalist rock star


By Knut Rostad

Jack Bogle richly deserves the huge accolades he's receiving. Actually, he may deserve more. Vanguard's low-cost index funds improved the bottom lines of tens of millions. Vanguard's annual reports and Mr. Bogle's books and lectures raised investors' financial IQ. As president of the Bogle Research Center over the past 22 years, Mr. Bogle and a staff of two became investors' superhero. Opinions of the Vanguard founder's greatest contributions have poured in from all corners. Burton Malkiel, former Princeton professor and a Bogle confidante, wrote about the enormous impact of the index fund. WSJ columnist Jason Zweig called him "the great democratizer" of capitalism for making stocks and bonds so accessible; he also cited his mental and physical toughness. The WSJ editorial board pegged its commentary, for the benefit of younger readers, by saying, "Investing used to be expensive," and said even more by closing with, "Jack Bogle was a... Read full post

Jan 23, 2019, 3:51 PM EST

No retirement for elderly Americans


By Bloomberg News

Traditionally, Americans could look forward to a comfortable retirement. After four decades in an office or a factory, sometime in their 60s they would lay down their burdens and enjoy a final couple of decades with time to relax, spend time with family and friends, and reflect on their life. But since the financial crisis, older Americans have been increasingly staying in the workplace.(More: Working longer is best way to boost retirement income)Some see this as a positive trend because it adds to the economy. But others rightly view it with trepidation because there's the distinct possibility that many of these elderly people just can't afford to retire. Whether their nest eggs were wiped out in the housing crash or they just didn't save enough, or whether their kids don't make enough money to support them, the decline of retirement seems like an ominous development.The pressures on older Americans to work will likely only become... Read full post

Jan 23, 2019, 11:03 AM EST

How advisers can help 401(k) clients with auto-rollovers


By Blaine Aikin

Retirement advisers looking to make positive changes in 2019 should resolve to help 401(k) clients arrange for mandatory distributions to rollover IRAs.​ Advisers can help plan sponsors trim their administrative costs, reduce fiduciary risks and provide potential wealth benefits to former plan participants by instituting a process to automatically distribute small account balances of departing employees into individual retirement accounts. Telling the auto-IRA story is straightforward. It starts with a simple acknowledgement that plan distributions can create real headaches. Terminated employees with low retirement-plan balances don't often give much thought to what they should do with the 401(k) money they left behind. If the participant doesn't act and there isn't a provision in the 401(k) plan mandating a distribution, that money stays in the plan. It may impose unnecessary administrative burdens and costs on the plan... Read full post

Jan 22, 2019, 12:40 PM EST

Active vs. passive: The case for both


By Aaron Hodari

Vanguard founder Jack Bogle started the debate about active versus passive investing when he created the first index fund in 1975. Hundreds of additional index funds, countless studies and one historic recession later, passive investing has become a household concept and is accepted as the preferred method of investing for millions of investors.You've seen the headlines and stats by now: We've reached the end of active investing. Billions of dollars are flowing from active to passive funds. Ninety percent of active stock managers fail to beat their benchmarks.If you've been following this debate for years, as I have, you've also probably seen the counterarguments, of which there are many.This is the wrong discussion. The reality is, when it comes to managing investments, there's room for both philosophies.Diplomatic, I know.First of all, when we talk about active versus passive investing, we're really having two separate discussions.... Read full post

Jan 22, 2019, 4:06 PM EST

Our future impact hinges on education


By Mark C. Tibergien

What role should financial advisers play in supporting personal financial education for our country's youth? We have our enlightened self-interest, of course, but we also have the opportunity to help consumers take control of their financial lives, to attract more young people to the profession and to promote our industry's reputation as a force for good rather than a source of evil.Consider the challenges. First, helping people with their financial lives.The statistics are stunning, no matter the source. According to Northwestern Mutual's 2018 Planning & Progress Study, 66% of Americans believe they will outlive their retirement savings; 21% of Americans have nothing saved at all; and a large percentage of retirees solely or primarily depend on Social Security for their retirement income.... Read full post

Jan 18, 2019, 10:49 AM EST

5 New Year's resolutions for advisers


By Sheryl Rowling

A new year has begun and most of us have the same goals: Add new clients. Make more money. Become more efficient. But these are not the same as resolutions. According to the Oxford English Dictionary, a resolution is "a firm decision to do or not do something." To reach your goals, specific resolutions must be accomplished. With that in mind, I'd like to suggest that each of you commit to at least one resolution for 2019.I'm committing to the following five resolutions:1. Schedule workouts. If I don't schedule exercise, it won't happen. This year, I've hired a personal trainer to come to the office for one hour Tuesday through Thursday. Since it's a good idea for everyone, training sessions are open to all employees. Thus, I've stacked the odds in favor of achieving this resolution. Workouts are scheduled, arranged and convenient — and there will be the added push of peer pressure!2. Take immediate action on at least one idea... Read full post

Jan 17, 2019, 5:03 PM EST

International investments bring a unique twist — foreign taxes


By Tim Steffen

Allocating part of an investment portfolio to non-U.S. stocks may be a good diversification tool, but it can also create unwelcome tax headaches. In particular, your clients may find themselves having to navigate the unfamiliar land of foreign tax withholding.When an investor owns stocks in countries based outside the United States, either directly or through a mutual fund or ETF, it's common for the other country to withhold taxes on dividend payments from the stock. Typical withholding rates range from 15% to 25%, but can be as high as the 35% charged by Switzerland. These extra taxes can be a real drain on an investment's total return.Before they're gripped by fears of double taxation, U.S. investors should know there are two remedies available to minimize — or even eliminate — this extra tax cost.(More: Vanguard recommends investors increase non-U.S. holdings to 40%)​ ... Read full post

Jan 16, 2019, 4:09 PM EST

Your competition is cashing in on your clients. Stop them!


By Frank V. Bonnano

According to a recent InvestmentNews survey, 45.3% of advisers plan to increase allocations to cash in 2019. This comes as no surprise. Given the recent market volatility and rising short-term rates, cash is dominating the media as the shiny asset class of 2019. At the same time, your clients may be asking about better yielding options for their non-sweep cash balances. Brick-and-mortar and online banks and others have begun to ratchet up rates on cash to appeal to rate-sensitive investors. Even fintech companies like Robinhood have focused on cash. Although Robinhood has hit some roadblocks to the launch of its cash offering, it's clear that investors are responsive to the cash message. Although cash is the asset class to which every client has exposure, it is typically the least spoken about. With such a keen focus on longer-term wealth management strategies, many advisers are not prepared to talk to clients about cash and often are... Read full post

Jan 16, 2019, 2:21 PM EST

Helping clients overcome emotional biases


By David Patchen

Last year marked the 10-year anniversary of the financial crisis and the resulting Great Recession. Advisers who were in the business a decade ago remember emotional and panicked calls from clients wanting to exit the market, fearful they might lose everything. Some of those clients who sold, and perhaps hesitated to reenter the market, were paralyzed by the emotional and financial toll they experienced in 2008-2009.Since then, we've seen reminders of how emotional investing can be for clients, especially given the market volatility since early October. In short, investors remain concerned about their portfolios and what any market drop might mean for their financial plan.... Read full post

Jan 15, 2019, 10:32 AM EST

6 ways advisers can make 2019 their 'prove it' year


By Ron Carson

Looking back, I feel as though 2018 was the advisory industry's first real year of momentous consolidation. We saw the beginnings of billion-dollar mergers (think Edelman and Financial Engines), broker-dealer acquisitions,​ IPOs, fintech buyouts and harbingers of more wirehouse breakaways. It was also the year of the DOL rule's demise, while ironically, we witnessed more sanctioned penalties and fines from government agencies for mismanagement of assets and transparency violations. From Wells Fargo's $575 million settlement with U.S. states to Wealthfront's $250,000 enforcement penalty from the SEC, our profession still finds itself falling short of putting client interests first. Mix these ingredients together, and you have the perfect recipe for another year of seismic change in financial services. If 2018 set the stage for the "movers," 2019 will be the year of the "shakers" — our "prove it" year, of sorts.... Read full post

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