FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Why It's Important For Advisors To Know About The Relatives Of Clients (The Wall Street Journal)
It's becoming increasingly important for advisors to consider the relatives of their high-net-worth clients during the financial planning process, writes Jean-Luc Bourdon California-based BrightPath Wealth Planning in a new WSJ column. This is because these clients often want to help struggling family members.
"Many clients assume that their relatives aren't relevant to the conversations they have with their advisers, but I tell all of my clients that it's critical I know about their extended families. We can have the most secure financial plan for a client, but if they have close relatives in precarious financial situations, it can weaken their own financial outlook."
The Most Compelling Argument To Own Cash (Advisor Perspectives)
"The best time for an investor to own cash is when it pays next to nothing. ," writes Francois Sicart of Tocqueville Asset Management. "This may sound counterintuitive, and it is the opposite of what most investors do when cash pays nothing: They scramble to find better-paying alternatives, even if it means taking on more risk. But the contrarian aspect of this rule has always appealed to me, and my own experience has generally vindicated it."
"Personal biases aside, the most compelling argument to owning cash when interest rates are close to zero is simply that, from that point, they basically have nowhere to go but up. And when they do, sometimes with a lag but sooner or later, lower prices for stocks and bonds will result."
This May Be The Beginning Of A Big Swing From Bonds To Stocks (Dr. Ed's Blog)
Retail investors could be flooding out of bonds and into stocks. In fact, over the past 13 weeks bond funds have witnessed cash outflows of $438 billion at an annual rate, while equity funds have seen inflows of $92 billion at an annual rate, according to the Investment Company Institute. "I wouldn't describe that as a 'Great Rotation' just yet, but it could be the start of a big swing by retail investors into equities," writes Dr. Ed Yardeni.
FINRA To Consider Revised Broker Compensation Rules (FINRA)
During its September 19 meeting, the Financial Industry Regulatory Authority (FINRA) will consider a revised proposal that would require brokers to disclose their compensation when they switch firms. The proposal was initially slated to be considered in a July meeting, but was postponed. At the time, Simon Roy, president of Jemstep told Business Insider that this had wirehouse support because "the proposed legislation is expected to reduce poaching of productive brokers from their ranks which could reduce broker compensation costs and increase firm profitability."
The Gold Bounce Is Over (Societe Generale)
Gold prices are falling again and Societe Generale's analysts who have been bearish on gold have said the "gold bounce is over." They make a few bearish arguments. 1. A military strike on Syria looks a lot less likely. And gold prices have peaked early during Middle East crises. 2. The weakness in the rupee and other such "Forex rate trends have turned bearish for gold price." 3. The physical demand for gold in Asia is weakening while supply from ETF selling is making its way to Asia. 4. Selling of gold ETFs will probably pick up as "Syria is no longer a bullish factor and US Fed tapering is likely to start at the September meeting."