Financial Planners Want More Regulation In The Financial Planning Industry

The Financial Planning Industry Needs More Regulation (Financial Advisor Magazine)

A new coalition of Certified Financial Planner Board of Standards Inc., the Financial Planning Association and the National Association of Personal Financial Advisors, says "there are insufficient regulations for financial planners and members of the public are the ones being hurt because of it," writes Karen Demasters.

The coalition conducted a study of consumers aged 25 and up who have a household income of $50,000 or more. The results show that about 33% of respondents who used a financial advisor did not get the service that they needed, or they wanted a financial plan but did not get one.

Additionally, there are people who claim to be financial advisors, but just provide "narrowly focused advice, single-product solutions, or advice that is not in the consumer's best interest," writes Demasters.

Keep Calm And Go Global (Alliance Bernstein)

Bond investors tend to prefer domestic assets over foreign ones. However, Alliance Bernstein research suggests that "global bonds have offered historical returns comparable to domestic ones - and with considerably lower volatility," writes Douglas J. Peebles.

Additionally, foreign bonds offer diversification of interest-rate and economic risk. "That's important today, as business cycles, national growth rates, monetary policies and yield curves around the world diverge," adds Peebles.

Active Management Is The Way To Go For Fixed Income (Investment News)

"There are many excellent ways to invest in fixed income in the current market environment. Passive strategies are not among them," writes Thomas Hoops.

Instead, investors should look to active strategies for investing in fixed income.

Active strategies allow for identifying instrinic value with respect to credit risk, interest rate levels, and currency valuations, according to Hoops. This type of analysis shows the strengths and weaknesses of a given economy, whether its a developed or an emerging market.

Advisors Should Be The Voice Of Reason When Markets Are Volatile (Financial Planning)

Volatility is all anyone can talk about right now. There are several ways advisors can help clients handle the anxiety. First, advisors have to educate and prepare their clients. Advisors should stress the importance of realistic risk tolerance and the inevitability of encountering volatile markets.

The second important thing is communication. "You want to be the voice of reason. You don't want to sound panicked, but you do want to acknowledge what's going on and what clients are hearing in the media," says John Anderson.

And finally, risk-tolerant clients should look at volatility as an opportunity. Advisors should recommend that client buy managed futures.

An Ex-AXA Broker Was Ordered To Return The $2 Million He Stole From Clients (The Wall Street Journal)

Dennis Wright, a former AXA Advisor LLC broker, was ordered by a Pennsylvania court to return more than $2 million that he stole from clients over the course of a decade.

"From at least 1998 he asked his clients, including a retired US postal worker, to withdraw tens of thousands of dollars from their AXA annuity accounts with the promise to invest those funds in AXA managed accounts that he claimed would generate higher returns," writes Matthias Rieker.

Those managed accounts did not exist. Instead, the SEC said that Wright would provide false account statements "showing rising values of the nonexistent investments."