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Successful Succession Plans Are The Holy Grail Of Firm Management

Mamta Badkar   

FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.

'A Successful Succession Plan Is The Holy Grail Of Firm Management' (ThinkAdvisor)

"The process of transitioning a firm to new leadership is difficult; enacting a successful and sustainable succession plan is the elusive holy grail of firm management," writes Mark Tibergien, CEO of Pershing Advisor Solutions in ThinkAdvisor. Often key employees choose to jump ship, others don't want to make partner because they like their current work-life balance.

When hiring and developing staff members, Tibergien thinks employers should watch five key areas to make succession plans down the line, easier. 1. During the selection process look beyond the resume to see what they are passionate about, how they handle different situations, what their ideal work culture is. 2. Make employees feel at home. Ensure that the rest of the team is helpful and welcoming of the new hire. 3. Examine your management style. "Do you empower others, recognize their contributions, create a positive learning environment, act with transparency and provide frequent constructive feedback?" 4. Is your compensation plan fair, is it competitive? 5. Examine other factors that could be a distraction.

ROSENBERG: 'We Are Into A New Secular Bear Market In US Treasuries' (Gluskin Sheff)

The 40 basis point drop in the 10-year Treasury note yield this year has been a big surprise. The rate was 2% around this time in 2013, and on its way to 1.5% two years ago. "So the way I see it, we are into a new secular bear market on U.S. Treasury securities," writes Gluskin Sheff's David Rosenberg. "This does not mean we can't revisit 2% again - I spoke at a retreat this weekend with Marc Faber (and others) and he sees this prospect as being non-trivial - but it would still be in the context of a new long-term uptrend. At the same time, we are unlikely to come anywhere close to prior yield peaks (over 5% in 2007, over 6% in 2000)."

Why Investors Should Seek Out High-Quality Dividend Paying Stocks (Investment News)

Investors are beginning to look for dividend paying stocks, writes Matt McCormick, portfolio manager at Bahl & Gaynor Investment Counsel, in Investment News. "According to FactSet, the average trailing P/E for non-dividend stocks in the S&P 500 was 27.7 times (cap-weighted) as of May 23, while the trailing P/E for dividend-paying stocks was 16.3 times," he writes. "The average trailing price-to-book value for non-dividend stocks was 3.6 times, versus 2.5 times (cap-weighted) for dividend stocks."

"I have previously asserted that the "risk-on" trade will eventually end in tears; valuations, fundamentals, quality and dividends will become paramount to investors sooner or later, and I've asked when that will occur. It appears that many investors believe the answer is "now" or "soon." Thus, I recommend that investors continue to seek high-quality, dividend-growth stocks."

Advisors Working With Unmarried Couples Should Remember A Few Key Things (The Wall Street Journal)

There are an increasing number of couples that choose to live together but not marry and this brings a whole host of challenges for advisors. Russ Weiss, a certified financial planner with Marshall Financial Group who specializes in working with unmarried clients, writes that cohabitation agreements is one way to tackle the issues that might come up. "Since divorce laws don't apply to unmarried couples, cohabitation agreements outline certain rules in case the unmarried couple breaks up," he writes. "Who gets the house? What happens to money that one partner gifted to the other?"

Advisors should also be aware of tax benefits from not being married. Since a married couple falls into the highest income tax bracket of 39.6% for income over $457,600. But for unmarried partners, they need to make $406,750 each before being subject to the rate. Advisors should also suggest trusts, instead of wills, to their unwed clients. "A lot of times, the family members of unmarried couples will contest a will in court," he writes. "But with a trust, when you die it circumvents the probate process."

Goldman's Top Economist Just Made The Call We've Been Waiting 5 Years To Hear (Business Insider)

"Despite the 1% drop in real GDP in the first quarter, we believe that the US economy is now growing at an above-trend pace," writes Goldman Sachs' Jan Hatzius. This, writes Business Insider's Joe Weisenthal, is the call we've been waiting to hear for five years. "The best way to see this is via our current activity indicator (CAI), which grew at an annualized rate of 3.4% in May, similar to the average of the prior two months."

"Although an estimated ½ percentage point of this sequential growth is due to a bounceback from the weather distortions of the first quarter, even the year-on-year CAI now stands at 2.7%, the fastest pace of the expansion so far and above our estimate of potential growth of 2%-2½%. In our view, the CAI is a far more reliable indicator of economic activity than real GDP because it is more timely, more broadly based, less noisy, and less subject to revision."

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