Nam Y. Huh/AP Photo
Bond funds are seeing outflows on rate hike worries (Wall Street Journal)
Morningstar says almost $1.2 billion exited bonds funds in February. This represents a 67.3% spike higher from the $717 million of outflows in January, and comes amid growing fears the US Federal Reserve will hike interest rates in the middle of the year. Active and tactical fixed-income investments have seen the brunt of the selling while RIAs have moved more money into passively managed fixed-income investments, like municipal bonds.
Merrill Lynch fined $2.5 million for giving presentations that were not approved by compliance (ThinkAdvisor)
Massachusetts has fined Merrill Lynch $2.5 million for giving presentations that were not pre-approved by compliance staff. The presentation was made to 300 financial advisors and covered Optimal Practice Model (OPM) Tools. According to regulators, the presentation "did not include language regarding client suitability or the fiduciary requirements of Merrill Lynch financial advisors."
Things to consider when saving for retirement (Bloomberg)
Bloomberg says the amount of money Americans have saved for retirement "depends on whether or not parents spend less money and save more when their kids are on their own." A study conducted by the Center for Retirement Research at Boston College (CRR) concluded the spending habits of 52% of retirees may not be sustainable as they progress deeper into retirement. To combat this, empty nesters should increase their savings after their children move out of the house. Doing this reduces the risk to 17%.
Make sure you claim your college tax breaks (Reuters)
According to Sallie Mae's survey, "How America Pays for College 2014," only 42% of those surveyed made use of tax breaks designed to ease the burden of college. The survey showed many high income earners simply didn't know they were eligible to receive the break, or that their kids could have used the tax credit. As for the low income end, only 36% received the $1000 refund. According to Reuters, "To qualify, the student must attend college at least half-time, and the credit cannot be claimed for more than four tax years." Reuters also notes, "The credit phases out between modified gross incomes of $80,000 to $90,000 for singles, and $160,000 to $180,000 for married couples filing jointly."
Charles Schwab unveils robo advisor for RIAs (Financial Planning)
Charles Schwab has unveiled its second robo advisor product of the month. The company's Institutional Intelligent Portfolios product is designed for RIAs, and is scheduled for launch in the second quarter. Charles Schwab Advisor Services Executive Vice President Bernie attributed the rise of the robot for the product's conception. "Our success has been built on helping our clients grow and we were worried they would be would be at a competitive disadvantage," he said. RIAs should note portfolios must hold 4% of assets in cash and that anyone firm with less than $100 million in assets under management will be subject to a fee of 10 basis points.