Displaying items by tag: advisors

(New York)

Retirement takes a lot of planning, which every financial advisor knows intimately. Yet, retirees themselves often forget some of the big things that can derail their financial plans. Accordingly, here is a list of several important high expense items that retirees forget to account for. Firstly, one-time big ticket things, like new furnaces, air conditioning units, repainting the house etc. This big expenses can catch retirees off-guard. Relatives in need are often another big commitment that retirees don’t see coming. Additionally, many don’t realize that as their Social Security distributions rise, they can be moved into a higher tax bracket and may also see their Medicare premiums rise.

FINSUM: This is a just a good reminder piece of some of the pitfalls of retirement.

(Washington)

While it has largely gone unnoticed by the wealth management media, New York state has just enacted a new best interest rule for annuities. As of August 1st, advisors must now consider the best interests of clients before selling annuities. Additionally, annuities sellers cannot call themselves advisors unless they are licensed to do so. The rule came about to try to fill a gap after the defeat of the DOL’s fiduciary rule last year. New York follows Connecticut and Nevada in making their own best interest rules governing certain products.

FINSUM: Annuities have been cleaning up their act in the last few years, and this will be another step in the process. Best interest rules notwithstanding, we do think the improving business climate for annuities is a good thing because they make sense for many clients.

(New York)

Barron’s has interviewed some of the top financial advisors in the country to figure out how they incorporate ETFs into their portfolios. We thought our readers might be curious. Raj Sharma, from ML, said that he thinks ETFs are just a tool and that active management still has a big role to play, especially in emerging markets and small caps. One top advisor, for whom ETFs comprise 50% of their business, says they use options bets against ETFs, something you can’t do with active funds. Another top advisor from ML, Peter Rohr, summarized ETFs nicely, saying: “ETFs allow us to control the controllable. We can control fees, we can control taxes, and we can control risk level”.

FINSUM: ETFs are a very flexible, and largely inexpensive product, facts which explain their explosive growth. However, that flexibility also means it takes strategy to put them to their best use.

(New York)

A year ago, annuities looked like a product that had outlived its regulatory life cycle. The pending DOL fiduciary rule seemed completely incompatible with the product and its selling practices, so annuities appeared likely to take a big hit. Then the rule got shot down in court, and the whole picture changed. Data is now in on 2018 annuity sales and it looks strong—sales smashed all previous records. In virtually every category of annuities, sales were up considerably, in many case 20% or more.

FINSUM: The annuity sales outlook has completely changed. The next five years—as the number of people 65 or older hits 60 million—looks to be very strong.

(Miami)

It seems like wealthy people everywhere are talking about picking up and moving to Florida to get away from the lack of SALT deductions in so many states. However, UBS financial advisors say it isn’t as easy as it is made to sound. Firstly, there are significant residency rules—it is not as if you can just buy a place in Florida and make it your tax home without really leaving your high tax state. And secondly, even for those who do actually want to move, the issue is that the wealthy suburban home market is very soft at the moment, and these residents are having a hard time selling their primary home, which means they are stuck.

FINSUM: Moving is not nearly as simple as the idea of “retiring in Florida” sounds. We do think this will cause a migration, but it will not be a flood.